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Beyond Meat Inc. reported third-quarter results on Monday.
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Shares of Beyond Meat Inc. plunged more than 25% in extended trading Monday after the flagship name in the plant-based meat field reported third-quarter results that badly missed Wall Street estimates.
The poor quarter was exacerbated by news a few hours earlier from McDonald’s Corp. MCD, -1.54% : The fast-food giant announced McPlant, a line of meat alternatives that will launch with tests of a faux burger next year that could ultimately lead to chicken and sausage substitutes.
Beyond Meat BYND, -4.05% reported a loss of $19.3 million, or 31 cents a share, vs. net income of $4.1 million, or 6 cents a share, in the year-ago quarter. Revenue improved just 3% to $94.4 million, from $92 million a year ago.
“Our financial results reflect a quarter where for the first time since the pandemic began, we experienced the full brunt and unpredictability of COVID-19 on our net revenues and accordingly, throughout our P&L,” Beyond Meat Chief Executive Ethan Brown said in a statement.
“Unlike the second quarter where record retail buying and freezer loading by consumers offset the deterioration of our food-service business as COVID-19 stay-at-home and related measures set in, the long tail of retail stockpiling by consumers, coupled with continued challenges across the majority of our food-service customers, led to Q3 results that were lower than we expected,” Brown said.
Beyond Meat said it and McDonald’s co-created the plant-based patty which will be available as part of the McPlant platform. Still, Brown cracked in a conference call with analysts late Monday that news of McPlant reminded him of a Mark Twain quote. “Reports of my death have been greatly exaggerated,” he joked, before hastily adding, “Our relationship with McDonald’s is fine.”
Still, a handful of analysts pushed back, citing an earlier McDonald’s call that they claim downplayed Beyond Meat’s input.
Underscoring the rough patch, Beyond Meat said it was suspending guidance for its fourth quarter and full fiscal year.
FactSet analysts expected earnings per share of 5 cents on revenue of $132.4 million.
Despite being grilled in after-hours trading Monday, Beyond Meat has led a flurry of activity in a sizzling market.
The urgency with which Beyond Meat has unfurled news has intensified in the past several weeks: It announced a partnership for plant-based Jamaican patties to be sold at Golden Krust; the launch of Beyond Breakfast Sausage Links at grocery stores nationwide; and increased grocery distribution of Beyond Breakfast Sausage Patties at retailers such as Kroger Co. KR, -6.51%, Walmart Inc. WMT, -1.53% and Publix.
Read more: Beyond Meat earnings preview: Competition and pricing could take a toll on margins
Beyond’s results come amid intensifying competition with rival Impossible Foods Inc., which last month announced it was “doubling down” on R&D investments for products and manufacturing.
Areas of investment could include improving taste and smell of existing products, new types of plant-based meat under development such as fish, and enhancing manufacturing processes, Impossible Chief Financial Officer David Lee told MarketWatch.
Shares of Beyond Meat are up 99% this year. The broader S&P 500 index SPX, +1.17% is up 10% in 2020.
