Shares of Beyond Meat (NASDAQ:BYND) fell over 13.5% in Wednesday’s after-hours trading. The plant-based meat company released its first quarter financial results, wherein its net loss was higher than the Street’s forecast. Moreover, the company’s Q2 guidance suggested weakness in demand, triggering a selloff.
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It’s worth highlighting that Beyond Meat is battling demand and macroeconomic headwinds, which are impacting its volumes and overall sales. Given the challenges, BYND stock is down about 33% year-to-date. Nonetheless, the company is introducing new products, and restructuring initiatives focused on reducing costs, which could provide some cushion to its share price.
Against this backdrop, let’s zoom in on Beyond Meat’s Q1 performance.
Beyond Meat Delivered Mixed Q1
BYND delivered net revenues of $75.6 million in Q1, down 18% year-over-year. This decline reflects a 16.1% drop in volumes. Moreover, trade discounts also remained a drag. Nevertheless, its top line came slightly higher than the Street’s expectations of $75.2 million.
By sales channel, U.S. retail net revenues decreased 16% due to a lower volume of products sold. At the same time, the U.S. foodservice channel’s net revenues fell 16.2%, reflecting a loss of distribution for certain items and demand softness. The International retail channel’s net revenues decreased by 12% due to reduced sales of chicken products in the European Union and softer demand for some products in Canada. International foodservice channel net revenues dropped 28.7%.
Beyond Meat reported an adjusted net loss of $0.72 per share in Q1, down from an adjusted loss of $0.92 per share in the prior-year quarter. However, it was wider than the analysts’ loss forecast of $0.67.
Outlook Suggests Continued Challenges
Beyond Meat expects its Q2 revenue to be between $85 million and $90 million, representing a 12-17% year-over-year decrease. This shows that the company’s challenges aren’t likely to abate soon.
Management expects its top line to continue to take a hit from weakened demand in the plant-based meat category, high interest rates, and macro uncertainty.
What is the Future of BYND Stock?
Given the softness in demand for plant-based meat, Wall Street is bearish about BYND stock’s prospects. BYND stock has four Holds and five Sells for a Moderate Sell consensus rating. Analysts’ average price target on BYND stock is $6.07, implying 26.07% downside potential from current levels.
