By Ananya Mariam Rajesh and Granth Vanaik
(Reuters) -Beyond Meat on Wednesday posted a bigger-than-expected quarterly loss as rising freight and raw material costs eat into its margins, and the plant-based meat maker said it expects further slowdown in demand for its products.
Shares of Beyond Meat (NASDAQ:BYND) fell 1% in extended trading after the company also missed quarterly revenue estimates.
Consumers, impacted by decades-high inflation, have been curbing spending on discretionary products such as pricier plant-based meat products and preferring pocket-friendly animal meat.
"We are testing a pricing reduction that more quickly collapses the pricing delta between one of our core products and its animal protein equivalent," Chief Executive Ethan Brown said on an earnings call.
In October, Beyond Meat trimmed its full-year revenue forecast for a second time on softening demand, specifically in its refrigerated sub-segment. The company had also cut 200 more jobs to save about $39 million.
"It doesn’t look like the top line will get significantly better for Beyond anytime soon," CFRA Research analyst Arun Sundaram said.
The company's margins have been hit due to lingering industry-wide supply chain challenges, the Russia-Ukraine war and rising inflation.
Beyond Meat, which faces increasing competition from companies such as Tyson Foods (NYSE:TSN) and privately owned Impossible Food Inc, has also been heavily discounting that has further pressured its margins.
CEO Brown said the volume of competition in plant-based meat category has eroded some of Beyond Meat's market share.
The company's net loss widened to $101.7 million, or $1.60 per share, in the third quarter. Analysts on average had expected a loss of $1.14 per share, according to IBES data from Refinitiv.
Net revenue fell 22.5% to $82.5 million, missing analysts' estimates of $98.1 million.