Beyond Meat Plunges 17% Following Q2 Revenue Miss & Disappointing Guidance

Beyond Meat (NASDAQ:BYND) experienced a significant drop in its shares, falling more than 13% in pre-market today after the company reported a quarterly loss that was wider than expected, alongside a decline in annual revenue.

The company reported a loss of $0.72 per share for the first quarter of 2024, which was worse than the anticipated $0.66 loss per share. Revenue for the quarter was $75.6 million, down 18% from the previous year, but slightly above the consensus estimate of $75.37 million.

In response to financial pressures, Beyond Meat increased its prices this quarter. However, volume decreased by 16.1%, indicating that consumers are reducing their spending. Additionally, despite these price hikes, the company's profit margins were impacted by increasing manufacturing and material costs. The gross margin for the quarter was 4.9%, a decrease from the 6.7% recorded the previous year.

Looking ahead to the full year 2024, Beyond Meat is projecting revenue in the range of $315 million to $345 million, which closely aligns with the midpoint consensus estimate of $329.8 million.

Beyond Meat (NASDAQ:BYND) shares dropped over 8% intra-day today following the company's announcement about its potential plan to offer and sell securities worth up to $250 million through various transactions. The offering could include an array of securities, such as common and preferred stocks, debt securities, warrants, purchase contracts, and units.

This announcement comes on the heels of Beyond Meat's earnings report released in late February, which revealed the company had $205.9 million in cash and equivalents and $1.1 billion in debt as of December 31. However, the filing did not confirm the commencement or certainty of any sales. Despite this news, Beyond Meat's stock had seen an over 15% increase in the past month, largely buoyed by its earnings results, but remains down by 6.6% for the year.

Piper Sandler analysts lowered Beyond Meat (NASDAQ:BYND) price target from $6.00 to $3.00 while maintaining an Underweight rating. The analysts' bearish outlook is based on ongoing pressure on EBITDA margins and a lack of significant sales growth.

Recent data shows a 19% revenue decline in the past eight weeks. This, coupled with volume and price decreases since January 2022, raises concerns about distribution and shelf space. Piper Sandler expects further near-term downside and has adjusted 2023 estimated sales from $375 million to $370 million and 2024 sales from $400 million to $375 million.

TD Cowen analysts initiated coverage on Beyond Meat (NASDAQ:BYND) with an Underperform rating and a price target of $10. As a result, shares dropped nearly 5% yesterday.

The analysts expressed concerns about the company's product quality and its fragile financial position. They noted that Beyond Meat is losing market share in the declining category of refrigerated plant-based meat alternatives, and while the company is taking steps to preserve cash and stabilize sales, the analysts believe that the financial risks and weak consumption patterns in the meat alternatives sector are significant challenges for the company.

Following the release of its Q2 results, Beyond Meat (NASDAQ:BYND) witnessed a sharp decline of over 17% in pre-market today.

The reported revenue for the second quarter was $102.1 million, reflecting a significant 30.5% decline compared to the same period last year. This figure fell short of the expected consensus estimate of $108.74 million. Meanwhile, the Q2 EPS stood at ($0.83), which was slightly better than the anticipated consensus of ($0.84).

The drop in revenue was primarily caused by a decrease of 23.9% in the quantity of products sold and an 8.6% decline in revenue for each unit of weight. This decline in product volume was largely due to sluggish demand in the product category, particularly noticeable in the company's U.S. retail and U.S. food service channels.

Looking forward, Beyond Meat predicts its 2023 revenue to fall within the range of $360 million to $380 million, which is notably below the Street estimate of $388 million.