Ethan Brown, Founder, President and CEO of Beyond Meat
Adam Jeffery | CNBC
The Covid Delta variant and work challenges result in fewer orders for Beyond Meat products from restaurants.
CEO Ethan Brown told analysts Thursday that independent restaurant operators stocked up on Beyond’s meat alternatives in the July 3 quarter, which helped US food service sales jump 269% year over year. However, the advent of the Delta variant as the dominant form of Covid in the US has caused some of them to lose their trust, leading to more conservative orders.
Brown also said a shortage of willing workers meant that at least one food service rollout was delayed until early next year.
“Those two effects, the impact of work and then the persistent clouding of the Delta variant, I think are having a slight impact on the hospitality industry at the moment,” said Brown. “For us, the main characteristic of the third quarter, and our forecast is, simply lack of visibility.”
For the third quarter, Beyond is forecasting revenue of $ 120 million to $ 140 million, which is below Wall Street’s estimates of $ 153.3 million.
While many restaurant companies say they haven’t seen a significant impact of the Delta variant on their sales to date, some places are starting to impose restrictions. New York City, for example, requires proof of vaccination for some indoor activities, such as eating indoors, which could affect restaurant sales.
The disappointing prospects combined with an unexpectedly high loss in the second quarter caused Beyond shares to drop more than 5% in extended trading.
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