Shares of Beyond Meat (BYND -5.80%) got raked over the coals on Friday morning, plunging by as much as 15.7% and briefly notching a new 52-week low. As of 12:01 p.m. ET, the stock was down 9.1%.
The catalyst that sent shares of the maker of plant-based meat substitutes down was a fourth-quarter financial report that was far worse than investors had anticipated.
Beyond Meat reported Q4 revenue of $100.7 million, a decline of 1.2% year over year. The bad news traveled down the income statement, as its gross profit margin of 14.1% was far worse than the 24.9% recorded in the prior-year quarter. This resulted in a net loss of $80.4 million, or $1.27 per share.
To give those numbers context, the analysts' consensus estimates had called for revenue of $101 million and a loss of $0.69 per share.
Beyond Meat executives tried to put the best possible spin on the news, saying that they saw strong growth in international markets, but that progress in the U.S. had been uneven.
"These gains, however, were dampened by what we believe to be a temporary disruption in U.S. retail growth," commented President and CEO Ethan Brown. He went on to say that the investments the company had made in order to scale up its production "weighed heavily on operating expenses and gross margin during a fourth quarter and year that were already impacted by lower than expected volumes."
Management's outlook wasn't very meaty either. The company is guiding for 2022 revenue in the range of $560 million to $620 million, which would represent growth of 27% at the midpoint.
Beyond Meat has struggled with supply chain issues, and has faced expenses stemming from its need to ramp up production to meet increased demand from a few key partners. These factors should moderate over time, lowering a somewhat high bar.
That said, there's still the larger question of how willing the population in general and meat-eaters in particular will be to occasionally (or regularly) substitute Beyond Meat's plant-based products for their animal-derived counterparts. While it may be years before we know the answer to that question, the short-term challenges Beyond Meat faces do not change the large opportunity that remains for the company.