(This story has been corrected to clarify that the company reported a “bigger-than-expected” loss in the headline and to add the deleted story to paragraph 1)
(Reuters) – Beyond Meat (NASDAQ:) reported a wider-than-expected quarterly loss and an 18% drop in revenue as its higher-priced plant-based meat products caught up in sales.
WHY IS IT IMPORTANT
Demand for Beyond Meat products, including hamburger patties, sausages and ground beef, has declined as customers such as McDonald’s (NYSE:) and Yum Brands face sluggish consumer demand due to persistent inflation.
CONTEXT
While Beyond Meat raised prices in the current quarter, the company’s sales fell 16.1% as consumers clamped down on spending. Despite the price increases, the company’s profitability came under pressure due to rising production and materials costs. Gross profit for the quarter rose 4.9%, compared with 6.7% growth last year.
KEY QUOTE
“The plant-based food industry still faces an uphill battle as consumers are still tightening their belts and are less likely to try new premium grocery brands,” said Blake Drosh, an analyst at eMarketer.
IN NUMBERS
The company reported revenue of $75.6 million for the quarter, compared with analysts’ average estimate of $75.2 million, according to LSEG.
In the U.S. foodservice segment, the company’s revenue fell 16.2% to $12.3 million, compared with a 5.3% decline to $14.7 million a year ago.
On an adjusted basis, Beyond Meat reported a loss of 72 cents per share for the current quarter, compared with analyst estimates of 67 cents per share.
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MARKET REACTION
Shares of the company, which maintained its guidance for full-year revenue and gross profit, fell about 10% in after-hours trading.