Is Beyond Meat (BYND 4.19%) beyond repair? With the share price declining steadily since the summer of 2021, the burden of proof lies squarely with the company to prove its viability amid strong meatless-meat competition and the retreat of COVID-19-related catalysts.
The stakes were particularly high as the company released its fourth-quarter earnings. Unfortunately for Beyond Meat's shareholders, the stock has taken a 13% haircut since the release. The results were worse than Wall Street had anticipated, and analysts weren't exactly preparing for a blockbuster quarter.
Granted, Beyond Meat's problems may be extrinsically sourced and macro-level, at least to a certain extent. In light of this, investors may be tempted to take CEO Ethan Brown's explanations and justifications to heart as they embark on a bottom-fishing expedition with Beyond Meat stock, but doing so may prove to be hasty.
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Three-course meal of disappointment
No matter how you slice it, Beyond Meat's fourth-quarter 2021 results were subpar. Starting with the top line, revenue of $100.7 million represented a 1.2% year-over-year decrease, while the company's operating loss more than tripled to $77.7 million. Particularly troubling was the 20% decline in U.S. retail revenue.
Moving on to the bottom line, Beyond Meat posted a $80.4 million net loss, drastically worse than the already worrisome $25.1 million loss from the prior-year quarter. The $1.27 loss per share was substantially wider than the $0.71 Wall Street consensus.
Beyond Meat bears could also feast on management's full-year 2022 guidance for revenue in the range of $560 million to $620 million, up 21% to 33%, respectively. This represents another comparative letdown as analysts had previously projected 2022 revenue growth of 37%.
NASDAQ: BYND
Key Data Points
An appetite for excuses
There wasn't much that Brown could highlight in the results, so the Beyond Meat CEO had some explaining to do. He might have over-delivered in that department, however, and crossed the line between justifications and excuses.
This isn't to suggest the cited extenuating circumstances weren't real or relevant. For example, in the fourth-quarter earnings press release, Beyond Meat mentioned "uncertainty related to COVID-19 and its potential impact including on demand levels, labor availability and supply chain disruptions," while the CEO pointed to "a temporary disruption in U.S. retail growth, for our brand and the broader category." In a similar vein, Brown cited "labor and supply chain challenges" in the latest earnings call.
Fair enough, but Brown also pointed the finger in other directions. For instance, the CEO described a "diminished focus on health-oriented eating choices with consumers opting instead for comfort foods and a reduced openness and ability to trial." In case that's not enough, Brown then circled back to COVID-19, saying, "[I]n 2021, we prepared to launch our largest in-store sampling program to date, only to scuttle those plans as the Delta variant took hold."
Message received
Okay, we get it -- Beyond Meat faced multiple challenges recently, some global and some company-specific. These are duly noted, but what analysts and investors undoubtedly want to see are strong revenue growth and a narrowing net loss.
Beyond Meat is known for its motto -- "Tasting is believing" -- but the stock's price action indicates that disappointing financial results won't whet investors' appetites.
