Beyond Meat Plunges as Pantry Stockpiling Comes to an End

(Bloomberg) -- Beyond Meat Inc. plunged after missing even the lowest of Wall Street forecasts for revenue, hit by a double whammy of eroding restaurant sales and a decline in consumers’ stockpiling of groceries.

Global sales rose 2.7% in the third quarter to $94.4 million, the company said Monday in a statement. That compared to the $132.1 million average of analyst estimates compiled by Bloomberg. The company also reported a net loss of 28 cents a share, after excluding some items. Analysts had projected a profit of 5 cents.

“For the first time since the pandemic began, we experienced the full brunt and unpredictability of Covid-19 on our net revenues,” Chief Executive Officer Ethan Brown said.

Shares fell 28% as of 5:24 p.m. in late New York trading.

Beyond Meat has tried to pivot to in-store sales as the pandemic has battered the restaurant industry, which had accounted for about half of the company’s sales at the start of the year. But even at-home demand took a pause this quarter, as the panic buying and freezer stockpiling that drove demand earlier in the year generally has subsided, the company said.

On a call with analysts, company executives said that consumers’ behavior was unpredictable in the third quarter, with purchases happening in large lumps. While there’s been some recovery in restaurant demand, the company says it’s too early to predict whether that persists. Beyond Meat still doesn’t have guidance for the year.

The maker of plant-based meat continues to bet on restaurants as a source of growth, however. Earlier Monday, Beyond Meat said it collaborated in the creation of new patties for McDonald’s Corp.’s new McPlant line. He said Beyond Meat, which fell sharply earlier Monday after McDonald’s didn’t mention the faux-meat maker in its announcement of the line, has a strong relationship with the fast-food chain.

Investment Plans

Brown said the disappointing quarter will not slow down the company’s investment plans.

“Rather than curtail activities in reaction to transitory macroeconomic conditions, we continue to invest in the pillars of our future growth, and in capabilities, infrastructure, and markets that support our global vision,” Brown said in the statement. He cited investments in factories in Europe and China, plus the next iteration of the Beyond Burger as examples.

“These initiatives brought expense during a period of disruption to our top-line, but we are confident in our belief that they will deliver strong long-term gains in enterprise value,” he said.

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