Beyond Meat Says Delta Fears, Workforce Issues Lead to Fewer Restaurant Orders

The delta variant of Covid and labor issues are leading to fewer orders for Beyond Meat products from restaurants.

CEO Ethan Brown told analysts on Thursday that independent restaurateurs had stocked up on alternatives to meat from Beyond in the quarter ended July 3, helping U.S. foodservice revenues rise 269% from it. a year ago. However, the emergence of the delta variant as the dominant form of Covid in the United States has led some of them to lose their confidence, resulting in more conservative orders.

Brown also said a shortage of volunteer workers has caused at least one restaurant service launch to be postponed until early next year.

“So those two effects, the labor impact, and then the lingering disorder of the Delta variant, I think, are creating a bit of a drag on food service right now,” Brown said. “And so for us, I think the main hallmark of the third quarter, and our focus is, is just the lack of visibility.”

For the third quarter, Beyond expects revenue of $ 120 million to $ 140 million, below Wall Street estimates of $ 153.3 million.

While many restaurant companies say so far that they haven’t seen a material impact on their sales from the delta variant, some localities are starting to impose restrictions. New York City, for example, will require proof of vaccination for certain indoor activities, such as eating indoors, which could hurt restaurant sales.

The disappointing outlook, combined with a larger-than-expected loss in the second quarter, caused Beyond shares to fall more than 5% in extended trading.