Beyond Meat reports below-par performance in Q1
Revenue in the first quarter failed to peak as the company cut prices and demand from restaurants fell
El Segundo, California-headquartered plant-based meat company Beyond Meat reported lower-than-expected revenue in the first quarter of 2022 as it cut prices and demand from restaurants fell.
Analysts noted that this was the company’s second consecutive disappointing quarter as it missed projected earnings by just under $3 million during the three month period.
Beyond Meat’s revenue rose by 1.2% to $109.5 million, leading to a 24% drop in the company’s share price in after-hours trading. Net loss for the quarter totalled $100.5 million, while adjusted EBITDA was a loss of $78.9 million.
In its earnings statement Beyond Meat said the total volume of products sold in the first quarter rose by 12%, despite net revenue per pound dropping 10%, largely because of discounts and reductions in list prices.
Ethan Brown, Beyond Meat’s president and chief executive stated that lowering prices to achieve parity with animal-based meat products remains the company’s long-term goal.
It was also forced to drop its prices in Q1 because of the appearance of new competitors, including lower-priced store brands.
Brown said: “There’s an environment where there’s a lot of unsustainable pricing behaviours going on.”
He added: “Though we recognise that the decisions we are making today in support of our long-run ambition have contributed to challenging near-term results, including a sizeable though temporary reduction in gross margin as we took cost-intensive measures to support important strategic launches, we are confident in the future we are building while advancing our mission to bring plant-based meats and their attendant health, climate, natural resource, and animal welfare benefits to consumers around the world.”
During the period the company secured a joint venture with PepsiCo, launching the Beyond Meat jerky as part of the deal.
Following the release of the results, Credit Suisse said the company would have to beef up its pricing power if it hopes to encourage any confidence from investors.