Beyond Meat Lowers Revenue Forecast

(Reuters) – Beyond Meat cut the top end of its annual revenue forecast on Wednesday due to cost-conscious consumers opting for cheaper alternatives to its expensive faux meat products.

Shares of the company fell approximately 5% in extended trading.

Despite raising product prices to offset high ingredient costs, demand for plant-based meatballs and steak declined. The company reported a 7.1% drop in quarterly sales volumes compared to a 3.5% increase last year.

Lower-to-middle income consumers are increasingly opting for affordable animal proteins to limit expenses. Additionally, customers in the restaurant and fast-food sector, such as McDonald's, have struggled with weaker demand, negatively impacting Beyond Meat's performance.

For fiscal 2024, Beyond Meat projects net revenue between $320 million to $330 million, a reduction from the previous forecast of $320 million to $340 million.

CEO Ethan Brown stated, "Looking ahead, we expect to increase our cash reserves by year-end and pursue further balance sheet restructuring in 2025."

On a positive note, declining costs for materials and logistics, along with increased net revenue per pound, helped expand quarterly margins to 17.7%, a stark improvement from a drop to 9.6% last year.

The company's quarterly net revenue rose by 7.6% to $81 million year-over-year, surpassing analyst estimates of a 7.2% rise to $80.7 million.

On an adjusted basis, Beyond Meat reported a loss of 41 cents per share for the quarter ending Sept. 28, which was slightly better than the analysts' estimate of a loss of 44 cents.