Beyond Meat (NASDAQ:BYND) stock is down a staggering 24% today after the company delivered disappointing first-quarter financial results.
BYND shares are now trading below the $25 price that they debuted at when the El Segundo, California-based company held its initial public offering (IPO) in 2019.
Before today, Beyond Meat’s stock had fallen 60% on the year to $26.17 per share as the company continues to struggle to boost flagging sales.
What Happened With BYND Stock
Beyond Meat reported a first-quarter net loss of $100.5 million, or $1.58 per share. That was much worse than the net loss of $27.3 million recorded in the year-earlier period. The company’s revenue came in at $109.5 million for the quarter, missing Wall Street forecasts for $112.3 million in Q1 sales.
Company executives blamed the poor results on the expensive launch of its plant-based jerky product, which it executed through a joint venture with PepsiCo (NASDAQ:PEP). The company’s gross margin in the quarter was 0.2% of revenue, down from 30.2% in 2021. Beyond Meat did reaffirm its full-year revenue forecast of $560 million to $620 million.
Why It Matters
Beyond Meat has struggled following an initial sales boom when it went public in 2019. The company faces increased competition in its food category and has failed to secure meaningful partnerships with fast-food chains.
Dunkin’ stopped selling Beyond Meat’s breakfast sausage at its 9,000 retail locations last year, and the company has yet to land a permanent menu item with McDonald’s (NYSE:MCD).
Consumers don’t appear to be embracing meat substitutes as enthusiastically as they did a few years ago. Many consumers no longer see the products as healthy, citing concerns over how processed they are and their fat and sodium content.
Several analysts are cutting their price targets on BYND stock today following the latest earnings miss. Barclays cuts its price target on Beyond Meat’s share price by 69%, citing “limited visibility” to a recovery path for the company.
What’s Next for Beyond Meat
The reaction to Beyond Meat’s Q1 results appears to be swift and immediate, and shareholders are taking it on the chin today. Moving forward, Beyond Meat will need to demonstrate improving margins and a path to profitability if it hopes to turn things around and get BYND stock moving in the right direction again.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
