By Shares of Beyond Meat fell sharply on Tuesday after the plant-based meat maker reported disappointing third-quarter results and a gloomy outlook for the remainder of the year.
The stock dropped 7.4% to $1.24 in trading, as investors reacted to widening losses and persistent demand challenges.
Beyond Meat posted a net loss of $110.7 million for the third quarter, significantly larger than the $26.6 million loss reported a year earlier.
The company attributed the steep decline partly to a $77.4 million noncash impairment charge related to certain long-lived assets, which was one reason it delayed the release of its results last week.
Total loss from operations reached $112.3 million, compared with a $30.9 million loss in the same period last year.
Adjusted loss per share came in at 47 cents. While revenue of $70.2 million edged past the $69 million consensus estimate from analysts polled by FactSet, it was down 13.3% year over year.
The company cited a 10% decline in product volumes and a 3.5% drop in revenue per pound sold as key factors behind the revenue slump.
The weak numbers reflect ongoing challenges for Beyond Meat and the broader plant-based meat industry, which has struggled for several years with waning consumer demand and falling sales volumes.
Persistent demand challenges for plant-based sector
Beyond Meat’s struggles underscore the broader difficulties facing the once high-flying plant-based food sector.
After peaking in 2021, Beyond’s sales have fallen sharply as inflation-weary consumers have turned away from pricier meat alternatives.
CEO Ethan Brown acknowledged that “category headwinds and an accompanying softer top-line continue” to weigh on results.
The company now expects fourth-quarter revenue between $60 million and $65 million, well below Wall Street’s forecast of about $70 million, according to LSEG data.
Beyond Meat also faces ongoing challenges from shifting consumer preferences, as many shoppers increasingly opt for less processed foods.
The rise of the “Make America Healthy Again” movement has further dampened enthusiasm for processed meat substitutes.
In addition to demand weakness, Beyond Meat’s suspension of operations in China earlier this year contributed to the widening quarterly loss.
The company said it is pursuing further cost reductions in an effort to stabilize its finances and improve profitability.
Meme-stock frenzy fades as fundamentals dominate
Beyond Meat’s latest results come just weeks after the stock experienced an extraordinary surge during a short-lived meme-stock rally in late October.
Shares soared more than 1,350% over three days, reaching as high as $7.69, before crashing back down as reality set in about the company’s weak fundamentals.
At its current levels, Beyond Meat has lost nearly two-thirds of its value this year.
The decline has been exacerbated by investor concerns over its financial health, particularly following a debt-for-equity swap in September aimed at avoiding near-term default on its credit obligations.
Despite its early success as the first pure-play plant-based meat company to go public in 2019, Beyond Meat has yet to turn an annual profit.
With falling sales, narrowing market share, and intensifying competition, the company’s path to recovery remains uncertain.
While Beyond Meat continues to tout the long-term potential of plant-based proteins, its latest results suggest that investor patience and appetite may be wearing thin.
The post Beyond Meat stock slide as losses deepen and demand weakens appeared first on Invezz
