Beyond Meat Inc., the maker of vegan burgers, sausages and chicken, declined in late trading Thursday after offering a sales outlook for 2022 that fell short of Wall Street’s expectations -- another sign that the company’s growth is tapering off. 

The company sees full-year net revenue in a range of US$560 million to US$620 million, below the estimate of US$645 million compiled by Bloomberg. The company said its actual results “could differ materially” if assumptions related to the pandemic do not materialize.

The results reinforce that the maker of plant-based foods, which was an investor darling after its 2018 initial public offering, is now struggling with competition, higher costs and supply-chain complexities. Of particular concern is a 20 per cent decrease in U.S. retail sales, which the company attributed to softer demand, calendar effects, increased discounting and “to a lesser extent, loss of market share.” 

Beyond Meat shares dropped 12 per cent at 4:59 p.m. New York time. The stock has been trading at its lowest level since its initial public offering in May 2019.

In the earnings statement, Chief Executive Officer Ethan Brown said sales in 2021 “were dampened by what we believe to be a temporary disruption in U.S. retail growth, for our brand and the broader category.” 

This outlook is further complicated by higher costs and investment that has impacted profitability. Gross margin in the fourth quarter of 14.1 per cent was well below the 24.4 per cent estimate. Brown said investment in employees, infrastructure and operations in the U.S., Europe and China “weighed heavily on operating expenses and gross margin” in the quarter. 

However, the company expects to “substantially moderate” the growth of operating expenses going forward as Beyond Meat makes progress on its long-term strategy, which involves driving down the cost of production and expanding partnerships with fast-food restaurant chains.