Shares of Beyond Meat (BYND) are down more than 10% after the company reported a wider-than-expected quarterly loss and declining revenues.
The earnings miss comes as Beyond Meat shifts its focus from slumping grocery sales to scaling its production for fast-food launches. Beyond Meat recently launched a KFC Beyond Fried Chicken sandwich and expanded its test for McDonald’s McPlant burger, which is made with Beyond Meat’s beef patty substitute.
But despite the potential new business and a plan to cut back on spending, the company reported a fourth quarter loss per share of $1.27 U.S. versus a loss of $0.71 U.S. that was expected. Revenue amounted to $100.7 million U.S. compared to $101.4 million that had been expected.
Management said higher costs came from the company’s choice to lean on more expensive co-manufacturing facilities rather than its own manufacturing plants for production. In addition to costing more, the shift also meant paying higher transportation and logistics fees.
During the fourth quarter of 2021, Beyond Meat’s net sales dropped 1.2% to $100.7 million U.S., falling short of expectations of $101.4 million U.S.
U.S. grocery sales fell 19.5% to $49.98 million U.S. Beyond attributed the slump to softer demand, increased discounts, loss of market share, and five fewer shipping days compared with the year-ago period.
After experiencing soaring demand in 2020, the company’s grocery division has struggled to keep up its pace of growth.
U.S. food service saw its sales climb 34.7% in Q4 to $20.63 million U.S. Outside Beyond’s home market, international sales rose 22.6% to $30.07 million U.S. across both grocery and food service.
This marks the second consecutive quarter that Beyond has disappointed investors and analysts with its losses and revenue.
Still, its fourth-quarter revenue falls within the outlook it provided to analysts last November of $85 million U.S. to $110 million U.S. as it forecast that some of the same operational challenges would drag down its results.
For 2022, Beyond Meat is now forecasting revenue of $560 million U.S. to $620 million U.S., up 21% to 33% compared with the year earlier. That outlook falls slightly below Wall Street’s net sales forecast of $637.3 million U.S.
Beyond Meat’s stock has declined 60% over the past six months to $49 a share.
