Shares in Beyond Meat lost more than a quarter of their value on Monday after the company said consumers had stuffed their freezers full of its plant-based burgers during lockdown earlier this year and dramatically slowed purchases since.
Meanwhile, sales at restaurants and fast-food chains that carry its products were still not fully recovered, the company said, delivering a second blow and leaving third-quarter revenues sharply below Wall Street’s forecasts.
The California-headquartered meat substitute company said revenues for the three months to September 26 rose 2.7 per cent from a year ago to $94.4m — a wildly different outcome from the 48 per cent rise predicted by the consensus of analysts’ forecasts.
Losses for the quarter were $0.31 per share, compared to predictions of $0.05 in earnings.
“This has been such a year of unpredictable buying patterns [by] the consumer,” said Ethan Brown, Beyond Meat’s chief executive.
Sales through retailers rose 41 per cent in the US and 27 per cent internationally from the year before, but the company did not see a repeat of the surge during the second quarter, when retail sales rose almost 200 per cent in the US and 170 per cent internationally.
“Freezers were full in households throughout the country,” said Mr Brown.
Consumers were currently buying in “lumps” rather than returning to regular buying patterns, he said. Meanwhile, restaurants were showing signs of recovery but with the Covid infection rate spiking in many countries, he declined to offer guidance for the fourth quarter.
Continued lockdowns hit food service channels in the US and international markets in the third quarter, with sales down 11 per cent and 65 per cent respectively from a year ago.
The results, which knocked the stock price down as much as 28 per cent to $107.50 in after-hours trading before recovering a little, overshadowed confirmation that Beyond Meat was working with McDonald’s to develop a burger for the fast-food chain’s McPlant range, expected to launch next year.
Comments from the fast-food chain that it will offer plant-based products “crafted exclusively for McDonald’s, by McDonald’s”, without mentioning Beyond Meat, initially triggered a sell-off in the plant-based meat group’s shares during the regular trading session on Monday.
They later recovered after Beyond Meat clarified the two companies had “co-created a plant-based patty which will be available as part of their McPlant platform”.
McDonald’s had trialled the “PLT” plant-based burger using Beyond Meat’s patties in Canada earlier this year but had not commented on a longer term tie-up.
A formal tie-up with McDonald’s will add to Beyond Meat’s list of partnerships with fast-food chains which includes Denny’s, Del Taco and Dunkin’ in the US.
In China, Beyond Meat’s products are offered through Starbucks outlets as well as a trial with Yum China in selected KFC, Pizza Hut and Taco Bell outlets.
Beyond Meat’s rival Impossible Foods’s tie-up includes Burger King, which offers the Impossible Whopper.