The Beyond Meat Inc (NASDAQ: BYND) stock price dropped 14.2% after releasing its Q2 earnings results for the three months ended July 1, 2023. The company’s net revenues plunged 30.5% to $102.15 million from the $147 million recorded in Q2 2022.
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The plant-based meat alternatives company also downgraded its full-year revenue outlook to between $360 million and $380 million amid a challenging operating environment characterised by record-high interest rates and inflation and the ongoing concerns about a looming recession in the United States.
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The company singled out high inflation as a crucial factor contributing to the soft demand for its plant-based meat alternative products as consumers chose the much cheaper meat products from animals instead of its more expensive substitutes.
Beyond Meat reported a 23.9% decrease in product volume sold and an 8.6% decrease in net revenue per pound as the key contributors to its lower revenues in Q2 2023. However, the company’s problems did not start this year. It has faced numerous challenges since 2022.
Beyond Meat’s stock was up 21.27% year to date, heading into today’s session before the release of its earnings results yesterday after the markets closed. The latest quarterly results will likely trigger a significant decline in its share price.
The company has benefitted from upbeat investor sentiment, but this could change. The firm might have to run more marketing to reignite consumer interest in plant-based meat alternative products since public interest in the products has declined since the company’s 2019 IPO.
Ethan Brown, Beyond Meat’s President and CEO, commented: “The second quarter brought mixed results amidst otherwise strong progress toward our goal of sustainable long-term growth. Ongoing category headwinds compressed net revenues, which in turn impacted product sales mix and gross margin, overshadowing significant strides in operational efficiency, including meaningful year-over-year reductions in operating expenses, COGS per pound, and overall cash consumption. While we are reducing our full-year 2023 net revenues outlook, we nevertheless expect a modest return to year-over-year top-line growth in the third and fourth quarters of 2023 and, relative to the first half of 2023, a meaningful reduction in cash consumption and an increase in gross margin.”
The Beyond Meat (BYND) stock price.
The Beyond Meat (BYND) stock price dropped 14.59% to trade at $13.05, from Monday’s closing price of $15.28.
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