By Anuja Bharat Mistry
(Reuters) -Beyond Meat cut the top end of its annual revenue forecast on Wednesday, as cost-conscious consumers reined in spending on its expensive faux meat products and switched to cheaper alternatives.
Shares of the company were down about 5% in extended trading.
Beyond Meat (NASDAQ:BYND)’s aggressive prices increases over the past few quarters to counter higher ingredient costs, which have now eased from their peaks, have hurt demand for its plant-based meatballs and steak.
Quarterly sales volumes took a hit with the company reporting a 7.1% fall, compared with a 3.5% rise a year ago.
Beyond Meat’s customers in restaurant and fast-food industries such as McDonald’s (NYSE:MCD) are also grappling with weaker demand, further denting the vegan burger meat producer’s performance over the last two years.
“It will be very difficult for these (plant-based meat makers) companies to win a second chance from consumers who already tried these products and did not have a good experience,” said Blake Droesch, analyst with eMarketer.
Beyond Meat expects annual revenue to be between $320 million and $330 million, compared with its prior forecast of $320 million to $340 million.
Easing materials and logistics costs as well as increased net revenue per pound helped in expanding its quarterly margins to 17.7% compared to a 9.6% drop a year ago.
But the company said it was also further restructuring its balance sheet in 2025 and looks to increase cash reserves by year-end.
It’s quarterly revenue rose 7.6% to $81 million beating estimates of a 7.2% rise to $80.7 million, according to data compiled by LSEG.
Excluding items, it reported a loss of 41 cents per share for the quarter ended Sept. 28, compared with estimates of a loss of 44 cents.