(Reuters) -Beyond Meat Inc's quarterly losses ballooned, as the plant-based protein maker spent heavily on product launches and offered big discounts as it tried to guard its market share against deep-pocketed players and nimble upstarts.
The company's stock slid 20% in extended trading on Wednesday, as Beyond Meat (NASDAQ:BYND) reported a gross margin of 0.2% for the first quarter ended April 2, a 30 percentage point slide from a year earlier.
The company blamed higher manufacturing and shipping costs as well as its move to launch a plant-based jerky with PepsiCo (NASDAQ:PEP) Inc for poor quarterly performance.
"To launch a first-time product at such a large scale and prior to the establishment of our own dedicated and streamlined process, we had to do so in an expensive and inefficient manner," Chief Financial Officer Philip Hardin said on an earnings call.
The company is also battling competition from Tyson Foods Inc (NYSE:TSN) and Kellogg (NYSE:K) Co, which are spending heavily to cater to the craze for plant-based meat, forcing Beyond Meat to offer deep discounts on its products.
"Investors are going to be increasingly questioning BYND's path to profitability, which isn't good for the shares in a rising interest rate environment," CFRA Research analyst Arun Sundaram wrote in a client note.
Beyond Meat reported a per-share loss of $1.58 in the first quarter, compared with 43 cents a year earlier and much wider than the market expectation of $1.01.
Sundaram also said Beyond Meat has burnt nearly $580 million over the past year, raising the likelihood of a capital raise by the end of 2022.
Omicron-induced decline in sales to restaurants weighed on Beyond Meat's revenue, which barely rose to $109.5 million in the latest quarter, missing Wall Street's expectations of $112.3 million, according to IBES data from Refinitiv.
Shares of the company have shed nearly 60% this year.