Vegetarian sausages from Beyond Meat Inc, the vegan burger maker, are displayed for sale at a market in Encinitas, California June 5, 2019.
Mike Blake | Reuters
Beyond meat on Thursday reported a smaller-than-expected loss for the fourth quarter, even as revenue fell more than 20%.
The company’s shares are up 14% in after-hours trading.
Here’s what the company reported, compared to Wall Street expectations, based on a poll of analysts by Refinitiv:
- Net loss per share: $1.05 vs. $1.18 expected
- Revenue: $79.9 million versus $75.7 million expected
For the fourth quarter, Beyond reported a net loss of $66.9 million, or $1.05 per share, down from a net loss of $80.4 million, or $1.27 per share, a year ago.
CEO Ethan Brown said the company’s margins improved 14 percentage points, helped by a reduction in its co-manufacturing footprint and better management of its manufacturing workforce.
net sales fell 20.6% to $79.9 million. Beyond said the total number of meat substitutes sold fell 16.9% in the quarter.
The company said demand for meat alternatives across “all channels” is still weak. In response, it has offered its products at discounts to attract customers who have been hampered by persistently high inflation. Beyond’s net sales per pound fell 4.4% in the quarter.
U.S. sales fell 20.9% as the company saw weaker demand in both its grocery and food service segments. Outside the US, Beyond reported a 19.9% decline in sales, fueled by a more severe drop in grocery sales.
And the company forecasts that its sales will continue to shrink this year.
Beyond is forecasting sales of between $375 million and $415 million in 2023, representing a 1% to 10% decline in sales. Wall Street was expecting a broader range of $322 million to $496 million.
Rather than growing revenue, Beyond’s primary business goal is to be cash flow positive in the second half of 2023. Gross margins are expected to be in the low double digits and to increase sequentially throughout the year.
Beyond and the broader meat alternatives category have struggled for more than a year and a half after a surge in demand early in the pandemic. Customers who tried the pricey meat substitutes did not stick with the products, especially as inflation drove up food prices.
“We believe that persistently high inflation, the slowing economy, increasing competition and consumer shopping behavior in protein are negatively impacting the growth of our category and our brand, but we believe this is temporary,” said Chief Financial Officer Lubi Kutua continued the company’s conference call on Thursday.
In response, Brown says Beyond has shifted from its original “growth first” strategy to focus on maintaining cash, reducing inventory, and striving for profitability.
In the past year, the company completed two rounds of layoffs and shed more than a fifth of its workforce. The company also plans to restructure operations for Beyond Jerky, which is part of its joint venture with PepsiCo.
Others in the plant-based meats category have had to make similar decisions as demand slacked. Impossible Foods is reportedly shedding 20% of its workforce after laying off 6% of employees last year. Elsewhere, Kellogg scrapped its plans to spin off and potentially sell its crop unit, which includes Morningstar Farms.