By Uday Sampath Kumar and Hilary Russ
(Reuters) – Beyond Meat Inc said on Thursday that restaurants are placing “more conservative” orders for its plant-based burgers due to uncertainty over to the Delta variant of the coronavirus, leading the company to forecast third quarter revenue below estimates.
Shares of the California-based company fell nearly 5% in extended trading.
“Given the recent uptick of COVID-19 cases, which could disrupt demand patterns, we believe caution for the balance of the year generally remains appropriate,” Chief Executive Officer Ethan Brown said in a statement.
The company said it expects third-quarter net revenue of $120 million to $140 million, substantially lower than analysts’ estimates of $153.3 million, according to IBES data from Refinitiv.
Widespread labor pressure delayed at least one product launch until the first part of next year, Brown said during a call with analysts.
Restaurants are placing “more conservative” orders due to their own staffing challenges and uncertainty about the Delta variant, which has also prompted European operators to pause or cancel promotions, Brown said.
In the second quarter ended July 3, the faux beef and chicken maker reported that sales in restaurants, dining halls and other food service venues were finally back in growth mode after taking a big hit during the pandemic, when dining rooms shuttered and restaurants streamlined menus.
Increased restaurant sales drove overall net revenues up 31.8% to $149.4 million in the second quarter, exceeding estimates of $140.8 million.
Even so, Beyond Meat also reported a bigger-than-expected loss, with earnings per share of negative $0.31 versus estimates of minus $0.24.
It also saw Dunkin’ Brands drop its Beyond Sausage sandwich at most locations as chains simplified menus, though it launched new dishes with Panda Restaurant Group, A&W Canada, Pizza Hut in the UK and KFC in China.
It revamped its faux hamburger product and brought back a chicken offering with the launch of plant-based chicken tenders in July.
Retail sales rose in international markets but fell 14% in the United States from the same quarter last year, when Americans hoarded groceries as lockdowns spread.
(Reporting by Uday Sampath in Bengaluru and Hilary Russ in New York; Editing by Will Dunham, Devika Syamnath and David Gregorio)
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