Beyond Meat (NASDAQ:) saw its shares tumble more than 13% in premarket trading Thursday after the company reported a wider-than-anticipated quarterly loss and an annual revenue decline.
The producer of plant-based meat substitutes posted a loss per share of $0.72 for the first quarter of 2024, worse than the consensus estimates of a $0.66 loss.
Revenue reached $75.6 million for the quarter, a decline of 18% year-over-year, and narrowly surpassed the consensus estimate of $75.37 million.
Although Beyond Meat raised its prices this quarter, volume declined by 16.1% as consumers tightened their spending.
Despite the price increases, the company’s margins were squeezed due to rising manufacturing and material costs. Gross margin for the quarter rose to 4.9%, compared to a 6.7% increase the previous year.
For FY2024, Beyond Meat projects revenue between $315 million and $345 million, aligning closely with the consensus estimate of $329.8 million at the midpoint.
“BYND 1Q24 results and outlook put a greater spotlight on management’s anticipated inflection in pricing and gross margins into 2H24 that remain central to assessing if a viable path to positive EBITDA and FCF exists in coming years,” analysts at Goldman Sachs commented.
They believe the print highlights the commercial execution risks, which “remain set against the backdrop of negative EBITDA and FCF this year and a YE24 cash balance that we would expect to decline to ~$112mn from the $174mn at 1Q24.”
“In the context of $1.15bn of debt maturing in 2027, we believe needs for incremental capital remain significant and pose significant dilutive risk to the current equity,” the analysts added, trimming the price target on BYND stock from $4 to $3.5.
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