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(Bloomberg) -- Beyond Meat Inc., the maker of plant-based burgers and sausages, fell in late trading on Thursday after forecasting that demand will moderate in the third quarter.
- The company sees revenue in a range of $120 million to $140 million -- below the $153 million estimate compiled by Bloomberg. That projection tarnished a rebound in sales to restaurants and second-quarter revenue that beat expectations.
- See more details.
Key Insights
- The company's third-quarter outlook suggests that Beyond Meat's rapid growth is cooling off quickly. While food-service sales were up 218% compared to a year ago, when the pandemic lockdown all but closed restaurants, they already are forecasting that will slow. Beyond Meat cited “an expected dampening of U.S. and international food-service revenue growth due to recent losses of distribution and operator challenges due to labor issues” as well as caution amid a renewed increase in Covid rates.
- Like other packaged-food companies, Beyond Meat is facing rising costs. The company highlighted higher headcount as it expands, increased marketing investment, and higher legal expenses, as well as the higher freight costs that have become common. Some of this was offset by “lower direct materials cost per unit.”
- “I'm optimistic about what lies ahead,” Chief Executive Officer Ethan Brown said in the statement. “That said, given the recent uptick of Covid-19 cases, which could disrupt demand patterns, we believe caution for the balance of the year generally remains appropriate.”
Market Reaction
- Beyond Meat shares tumbled as much as 8.8% after regular trading Thursday in New York before paring the decline to 3.4% as of 4:14 p.m. Beyond Meat fell 2.5% this year through Thursday's close.
Get More
- See Beyond Meat estimates.
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