Get Beyond Meat, Inc. Reportshares fell Thursday as the plant-based food company suffered a greater-than-expected loss in the first quarter as advertising and new product launch costs reduced the impact of remarkable volume growth.
Beyond Meat suffered a profit loss of $1.58 per share for the three months ended in March, much outside the Street forecast, falling from a loss of 43 cents per share last year, even as revenue rose to $109.5 million. Inflation and supply chain snarls ate into profit margins, which narrowed to just 0.2%, compared to 30.2% last year, according to a CFO.
Beyond Meat has expanded its plant-based chicken products to various CVS (CVS) - Get CVS Health Corporation Report, Albertsons (ACI) - Get Albertsons Companies, Inc. Class A Reportand Whole Foods (AMZN) - Get Amazon.com, Inc. Reportlocations while prepping the introduction ofBeyond Burger and Beyond Meatballs to 2,000 different U.S. stores.
Get McDonald''s Corporation Reports claimed it would expand the testing market for Beyond Meat''s plant-based burger starting in February, offering it at over 600 test locations in establishments in the United States, mostly in and around San Francisco and Dallas.
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Beyond Meat''s forecast for total sales of $560 million to $620 million was reiterated in the coming financial year, adding that margins will steadily improve over the second half of 2022.
"The high cost of Beyond Meat Jerky will continue to be a headwind in Q2, but we expect substantial improvement in Jerky unit economics in Q3 and Q4. "We expect Q1 2022 margins to be the low point in ''22, with continued improvement in Q2, although still below historical levels, improved back into higher margins later in the year."
Beyond Meat''s stock was marked 24.1% lower in pre-market trading, indicating a $19.86 opening bell price, a move that would extend the stock''s six-month decline to 77%.
"We noted that, over the course of Q1, Beyond implemented a series of cost-intensive measures which, while temporarily reducing the company''s gross margin, are intended to support long-term growth objectives," saidCanaccord Genuity analyst Borobby Burleson, who reduced his price target on the stock by $15, to $35 per share, despite maintaining his ''hold'' rating following last night''s earnings.
"While valuation has come in significant, we remain on the sidelines based on the assumption that additional estimate cuts will be required prior to achieving substantial improvements," he added.