Beyond rising meat losses as costs rise, demand for fake meat slows By Reuters

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© Reuters. FILE PHOTO: The company logo and business information of Beyond Meat is displayed on a screen during the IPO at the Nasdaq Market site in New York, U.S., May 2, 2019. REUTERS/Brendan McDermid / File Photo

By Ananya Mariam Rajesh and Granth Vanaik

(Reuters) – Beyond Meat posted a bigger-than-expected quarterly loss on Wednesday as rising freight and raw material costs eat away at its margins, and the plant-based meat maker said it expects a further slowdown in demand for its products.

Shares of Beyond Meat (NASDAQ:) fell 1% in extended trading after the company also missed quarterly earnings estimates.

Consumers, hit by high inflation for decades, have cut spending on discretionary products such as more expensive plant-based meat products and favored pocket animal meat.

“We are testing a price reduction that more quickly reduces the price delta between one of our commodities and its animal protein equivalent,” Chief Executive Ethan Brown said on an earnings call.

In October, Beyond Meat lowered its full-year revenue forecast due to slowing demand, particularly in its chilled sub-segment. The company had also cut an additional 200 jobs to save about $39 million.

“It doesn’t look like revenue is improving anytime soon for Beyond,” said CFRA Research analyst Arun Sundaram.

The company’s margins were hit due to ongoing industry-wide supply chain challenges, the Russian-Ukrainian war and rising inflation.

Beyond Meat, which faces increasing competition from companies such as Tyson Foods (NYSE:) and privately owned Impossible Food Inc, also cut their margins sharply.

CEO Brown said the sheer volume of competition in the plant-based meat category has eroded some of Beyond Meat’s market share.

The company’s net loss widened to $101.7 million, or $1.60 per share, in the third quarter. Analysts on average had expected a loss of $1.14 per share, according to IBES data from Refinitiv.

Net revenue fell 22.5% to $82.5 million, missing analysts’ estimates of $98.1 million.

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