Beyond Meat posts surprise loss as inventories drop and restaurant sales dip


(Reuters) – Beyond Meat BYND.O on Monday posted a surprise quarterly loss and lower than expected sales, penalized by weaker demand for its plant-based meat in restaurants and retail stores after a sharp increase at the start of the COVID-19 pandemic.

Shares fell 29%, as sales increased at their slowest pace since the company’s IPO in May 2019. They had closed 4%, in part due to McDonald’s Corp. MCD.N decision to launch a new line of plant-based meat options called “McPlant,” which was seen as the chain developing its own line of mock meats.

Several reports called the decision by the world’s largest burger chain earlier today to end Beyond Meat’s partnership with the company, but chief executive Ethan Brown said it was “grossly overkill.”

“Our relationship with McDonald’s is good. It’s really strong. Our work there on behalf of what they do continues, ”he said. McDonald’s declined to comment on its suppliers, however.

Beyond Meat also said it co-created the plant-based patty for McPlant after working on the development of a so-called “PLT” burger, which was tested in Canada earlier this year.

Brown said Beyond Meat will sell its burgers at 7,000 locations at pharmacy health care company CVS Health Corp. CVS.N in the United States, as more and more people are shopping there. The company will also sell its Beyond meatballs at 5,000 CVS pharmacies.

SLOWEST QUARTER

After a nearly 200% increase in retail sales in the last quarter, growth slowed to 40.5% in the third quarter, as consumers who stocked their freezers with Beyond Meats sausages, burgers and meatballs at the start of the season. pandemic, slowing down purchases.

The company has also been hit by a sharp drop in sales at establishments such as universities and offices due to the COVID-19 pandemic as well as launch delays with some of its fast food partners.

Restaurant sales in the United States fell 11.1% in the quarter, as Beyond spent more than expected to deal with the fallout from weak restaurant demand.

Excluding items, the company posted a loss of 28 cents per share compared to analysts’ expectations of a profit of 5 cents.

Net sales rose 2.7% to $ 94.4million (£ 71.83million), but largely missed the estimate of $ 132.81million.

The company decided to keep its outlook on hold, saying it was unable to predict the impact of COVID-19 on its business for the remainder of the year.

Additional reporting by Praveen Paramasivam in Bangalore; Editing by Aditya Soni and Arun Koyyur


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