Beyond Meat posted a surprise quarterly loss and lower-than-expected sales on Monday, hurt by weaker demand for its plant-based meat at restaurants and retail stores after a surge at the start of the COVID-19 pandemic.

Shares slumped 29% in after market trading after closing down 4%, partly due to McDonald's Corp's decision earlier in the day to launch a new plant-based meat alternatives line called "McPlant."

The company said the onset of the pandemic had led to panic buying in the last quarter and resulted in consumers loading up their freezers, which contributed to weak demand in the third quarter.

Sales growth in its U.S. retail channel slowed to 40.5% in the third quarter from a nearly 195% surge in the prior quarter.

Chief Executive Officer Ethan Brown said the company was also hit by a sharp drop in sales at restaurants that were "disproportionately affected by COVID-19" and due to delays in launches with some of its big quick service restaurant partners.

Beyond gets half of its sales from restaurant chains such as Dunkin Donuts and Subway, many of which shut stores and limited menus due to COVID-19 related restrictions on movement.

U.S. restaurant sales fell 11.1% in the quarter, while it also spent more than expected to deal with the fallout of weak demand from restaurants.

The higher costs in part led the El Segundo, California-based company to report a net loss of $19.3 million, or 31 cents per share, compared with a profit of $4.1 million, or 6 cents per share, a year earlier.

Net sales rose 2.7% to $94.4 million in the quarter ended Sept. 26, widely missing analysts' average estimate of $132.81 million, according to Refinitiv IBES data.

The company decided to keep its outlook suspended, saying it was unable to predict the impact of COVID-19 on its business for the rest of the year.