Beyond Meat’s revenue fell nearly 9% in the third quarter as higher sales of its plant-based meat in Europe failed to make up for plummeting demand in the U.S.
Beyond Meat on Wednesday reported revenue of $75.3 million for the July-September period. That was far short of the $86.5 million Wall Street had anticipated, according to analysts polled by FactSet.
Beyond Meat cut its third-quarter and full-year revenue forecast last week, saying an anticipated rebound in plant-based meat sales during the quarter didn't occur. The company said it would cut 65 non-production jobs — about 19% of its workforce — and conduct a broader review of its operations.
In a conference call with investors Wednesday, Beyond Meat President and CEO Ethan Brown said the company is considering cutting underperforming product lines like plant-based jerky and reducing the size of its operations in China, where demand is growing but not as quickly as Europe. It's also continuing to cut inventory.
“To drive down the type of cost reduction we’re pursuing everything has to be on the table," he said.
Brown said customer demand in Europe was a bright spot during the quarter. Beyond Meat's international retail sales rose 39% while international food service sales jumped 79%, largely due to European demand for its plant-based burgers and nuggets at McDonald’s. McDonald’s doesn’t sell those products in the U.S.
Brown said European consumers buy plant-based meat because they're concerned about the climate and they perceive those products as healthier. But in the U.S., he said, ads funded by the meat industry and others have led consumers to see plant-based meat as overly processed and unhealthy. Beyond Meat is running ads this fall to counter that message, he said.
“There’s some misinformation out there that we just need to do a better job of cleaning up," he said.
The higher price of plant-based meat has also hurt U.S. sales at a time when consumers are stressed about inflation, he said. Brown said the company lowered some prices in the third quarter but didn't necessarily bring new customers into the category.
Beyond Meat said its U.S. retail sales fell 34% in the third quarter. U.S. food service sales also fell 22% as restaurants like Panda Express that had limited-time promotions of Beyond Meat products last fall didn’t repeat those offers this year.
Beyond Meat's U.S. sales mirrored broader declines across the U.S. industry. U.S. retail dollar sales of fresh meat alternatives, like plant-based sausage and burgers, were down 21.5% this year through Oct. 8, according to Circana, a market research firm. Frozen plant-based meat sales, including items like tenders and nuggets, were down 6%.
The El Segundo, California-based company narrowed its net loss for the quarter to $70.5 million compared to $101.7 million in the same period a year ago. The loss, of $1.09 per share, also fell short of analysts’ expectation of an 89-cent loss.
Beyond Meat's shares fell 5% to close at $6.62 on Wednesday, down 46% from the start of the year. Its shares fell 1% in after-hours trading Wednesday.