Shares of plant-based food company SunOpta Inc. (STKL 2.76%) fell as much as 18.1% in trading on Wednesday after reporting second-quarter 2021 financial results. Shares closed trading down 6.3% for the day.
Revenue increased 9.7% to $202.3 million in the quarter, driven by a 21.4% increase in plant-based products and offset by fruit-based sales falling 1.9%. The loss from continuing operations was $0.9 million, improving on a loss of $5.1 million a year ago, and net loss was $1.7 million, or $0.02 per share.
Analysts were expecting revenue of $198.9 million and a loss of $0.01 per share, so results were mixed, compared to Wall Street estimates. But that's to be expected in a growing company, and the miss wasn't too bad overall.
Taking a step back, SunOpta's revenue is growing, and gross margins are up (13% vs 12.6% a year ago) in a tough commodity environment. Companies producing goods have struggled with higher costs that they can't pass on to customers, but SunOpta is navigating that environment well.
Given the trends in the business, I think today's sell-off is overdone. This is definitely an agriculture stock that I'm adding to my watchlist.