The stock market has been locked in a steady downtrend, and investors appeared likely not to get much respite based on Thursday morning's action in the futures markets. Inflation remained a primary concern, and volatility in other financial markets also weighed on sentiment about stocks generally. As of 7:30 a.m. ET, futures contracts on the Nasdaq Composite (^IXIC) were down three-quarters of a percent to 11,879, worsening the index's bear market drop.
Among individual stocks, though, there were more mixed signs. Online dating specialist Bumble (BMBL 5.94%) was up after reporting solid results and reassuring investors about its future prospects. Yet for plant-based meat alternative specialist Beyond Meat (BYND 1.75%), its latest financial report brought only more questions for hard-hit shareholders. Below, you'll learn more about what Bumble and Beyond Meat said and the implications for the broader market.
Bumble buzzes higher
Shares of Bumble moved higher by 11% in premarket trading Thursday morning. The online dating company's report on first-quarter financial performance gave investors more confidence about how it's likely to perform in the months and years ahead.
Bumble's sales numbers were solid. Total revenue climbed 24% to $211 million, despite facing unfavorable impacts from foreign currency fluctuations. Sales on the Bumble app jumped at an even faster 38% pace, although Bumble didn't get as much success from its Badoo and Fruitz offerings, sending that segment's revenue down 4% year over year. Bumble saw paying users rise to 3 million, and average revenue per user climbed 14% to $22.76. Earnings fell sharply from year-ago levels, but that was due to a one-time tax benefit last year that didn't recur, and Bumble still eked out a profit of $0.13 per share.
Moreover, Bumble sees good times ahead. Total revenue for 2022 should come in between $934 million and $944 million, with Bumble app growth rising 34% to 36%. Although the Russia-Ukraine conflict will have a $20 million downward impact on annual sales, Bumble expects adjusted pre-tax operating margin to remain healthy at around 24.5% to 25%.
Bumble has taken a big hit during the downturn in high-growth stocks. However, its fundamental business still looks healthy, and shareholders are getting at least a bit of a reprieve following its latest report.
Beyond Meat fizzles
Shares of Beyond Meat, however, were down 27% in premarket trade. The plant-based food specialist reported disappointing results for its first quarter that called into question its future strategy.
Beyond Meat's numbers didn't look appetizing. Sales growth slowed to a crawl, with first-quarter revenue rising just 1.2% to $109.5 million. Losses ballooned to more than $100 million for the quarter. Beyond Meat reported solid sales gains in the U.S. retail market, but substantial declines in the domestic foodservice segment weighed on performance, as did substantial declines in sales overseas.
Part of the problem was that Beyond Meat introduced products that reduced its gross margin. In particular, the company cited its Beyond Meat Jerky product, which it says has a "complex and high-cost manufacturing process" that hurt gross margin by more than 9 percentage points. The company said sales unit volumes were higher in many of its markets, but higher trade discounts and cost issues weighed heavily on profitability.
Beyond Meat is still hopeful that it can grow in 2022, projecting revenue to rise 21% to 33% to between $560 million and $620 million. However, that range is extremely wide, and the company warned that problems like labor costs, supply chain disruptions, and geopolitical tensions could cause it to miss its guidance.