Beyond Meat cuts Q3 revenue guidance, shares tumble
By Michele Maatouk
Date: Friday 22 Oct 2021
(Sharecast News) - Beyond Meat cut its revenue guidance for the third quarter on Friday as it cited a decline in retail demand, the impact of the Delta variant and operational challenges, sending shares in the plant-based meat producer tumbling.
The group now expects net revenues of around $106m, down from previous guidance of between $120m and $140m. While it was expecting a sequential decline in net revenues, it said the deceleration was larger than anticipated, with a number of factors contributing to the shortfall.
"While the company continues to study the drivers behind this quarter's performance, the company believes demand was impacted by broader ongoing macro and micro-economic factors, including among others, the effects of the Covid-19 Delta variant," it said.
"The company also experienced a decrease in retail orders that persisted longer than expected from a Canadian distributor coinciding with the reopening of restaurants, expected incremental orders that did not materialise from a change in a distributor servicing one of the company's large customers, observed delays in distribution expansion and shelf resets believed to be driven by customer labour shortages, and incurred shortfalls at certain US foodservice customers believed to be driven by the effects of the Covid-19 Delta variant."
Beyond Meat also pointed to challenges in operations that led to unfulfilled orders, with severe weather as a key driver resulting in the loss of potable water for two weeks in one Pennsylvania facility and water damage to inventory in another.
These impacts were partially offset by accelerated orders from an international customer during the quarter.
At 1350 BST, the shares were down 14% in pre-market trade to $93.49.
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