Beyond Meat posted a wider-than-expected quarterly loss and an 18% drop in revenue as its higher priced plant-based meat products hit volumes.
Demand for Beyond Meat's products - including burger patty, sausages and ground beef - weakened as their customers such as McDonald's and Yum Brands saw sluggish consumer demand owing to sticky inflation.
While Beyond Meat increased its prices in the current quarter, the company's volumes fell 16.1% as consumers kept a tight lid on spending.
Despite price hikes, the company's margins came under pressure from higher manufacturing and material costs. It's gross margin in the quarter rose 4.9%, compared with a 6.7% rise last year.
'An Uphill Battle'
"It remains an uphill battle for the plant-based industry, as consumers are still tightening their belts and are less likely to try new premium grocery brands," said Blake Droesch, analyst from eMarketer.
For the first quarter, the company posted revenue of $75.6 million (€70.2 million), compared with analysts' average estimate of $75.2 million (€69.9 million), according to LSEG data.
In its US food service segment, the company's revenue fell 16.2% to $12.3 million (€11.4 million), compared to a decline of 5.3% to $14.7 million (€13.7 million) a year ago.
On adjusted basis, Beyond Meat reported loss of 72 cents per share for the quarter ended March 30, compared with analysts' estimates of a loss of 67 cents per share.
President and chief executive Ethan Brown commented, “In Q1, we made solid progress against our 2024 priorities, including: hitting our first quarter revenue objective; reducing operating expenses and cash consumption year-over-year; bringing production in-house to reduce costs and improve quality; and commencing shipments of Beyond IV, the fourth generation of Beyond Burger and Beyond Beef, to our customers, to the praise of nutritionists and consumers alike.”
News by Reuters, additional reporting by ESM.
