Preview: Beyond Meat sales under threat as plant-based boom withers

Oatly AB

03/08/2022 18:23

By Praveen Paramasivam
    Aug 3 (Reuters) - Beyond Meat Inc  BYND.O  is headed for an
unappetizing second quarter as the plant-based food craze
withers in the face of several weak product tests at restaurants
and mediocre reviews. 
    Analysts have slashed forecasts for Beyond Meat's sales on
supply-chain concerns and waning demand that pulled down shares
of the plant-based meat maker and peer Oatly Group AB  OTLY.O 
from their lofty market debut levels.
    "Part of the issue with the adoption of the category for new
consumers is that you're not going to change cultural tastes
overnight," Mizuho analyst John Baumgartner said. "Recruiting
your next phase of consumers requires more innovation and better
tasting products." 
    Estimates for Beyond Meat's second-quarter revenue have
fallen by 10% over the last three months, according to Refinitiv
IBES data.
    
    
    CONTEXT
    McDonald's Corp  MCD.N  last week became the latest chain to
not go through with an immediate broader launch of Beyond Meat
products, after concluding its U.S. test of a burger made with
the plant-based meat without confirming future plans.
    Tests at Panda Express and Yum Brands Inc's  YUM.N  KFC,
Pizza Hut and Taco Bell have also yet to lead to a permanent or
U.S.-wide launch, while Dunkin, Hardee's and A&W have
discontinued products after launching, according to brokerage
Piper Sandler.
    Reviews for Beyond Meat's plant-based jerky also indicate
skepticism about the taste of the product, stoking concerns
about the sustainability of its sales momentum, Piper Sandler
analyst Michael Lavery wrote in a note on Friday.
    The company has had to discount more to encourage
inflation-hit consumers to pick up its products over those of
competitors at grocers, leading analysts to say its expectation
for average revenue growth of 27% for 2022 now appears steep.
    
    FUNDAMENTALS
    * Beyond Meat is expected to post a marginal increase in
revenue for the second quarter, when it reports on Thursday,
with loss per share widening to $1.18.
     * Wall Street expects Beyond Meat to lose $4.48 per share
for 2022, much bigger than the $2.88 it expected on April 27,
when the company reported results for the first quarter.

    

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Plant-based food maker's shares    https://tmsnrt.rs/3OURD5h
Wall Street estimates for Beyond Meat's revenue slides    https://tmsnrt.rs/3SqDsIj
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 (Reporting by Praveen Paramasivam in Bengaluru; Editing by
Devika Syamnath)
 ((Praveen.Paramasivam@thomsonreuters.com; https://twitter.com/PraveenR_P
 ; +91 867-525-3569;))