Beyond Meat Inc. lowered its full-year sales guidance and said shoppers are switching from its plant-based options to cheaper animal proteins.
The shares, which are down about 50% of their value so far this year, are down 1.1% as of 5:32 p.m. late New York trade.
The plant-based burger maker is in a race to ramp up production and bring new products to market — an expensive process that has raised concerns about whether its pace of spending is sustainable. At the same time, the company faces volatile demand for its relatively high-priced products as inflation erodes purchasing power. The company said gross profit was negative, partly due to slow-selling products being liquidated.
“Today’s inflationary pressures are a significant concern for the plant-based meat industry,” said Shoggi M. Ezeizat, consumer equities analyst at Third Bridge. “Flexitarians could easily switch back to lower-cost animal protein as they try to reduce their discretionary spending.”
Speaking to analysts, Chief Executive Officer Ethan Brown acknowledged that consumer buying behavior has shifted away from plant-based meats. His company now sees full-year sales in a range of $470 million to $520 million. That’s down from the previous range of $560 million to $620 million. Second-quarter revenue of $147 million also missed Wall Street estimates.
Beyond Meat had $455 million in cash and cash equivalents for the quarter ended July 2, compared to $548 million for the end of the first quarter.
Cash burned during the period was $70.5 million — down from the $162.5 million burned in the first quarter. The company had $1.1 billion in outstanding debt at the end of the quarter.
The company said it is reducing its workforce by about 4%, confirming a Bloomberg News report on Wednesday. The move is expected to result in annual savings of approximately $8 million, although severance costs will total $1 million.
International foodservice sales provided a bright spot, up 7% primarily due to higher volume. Overseas consumers have proven more receptive to replacing meat with alternative products than Americans have.
US foodservice net income fell 2.4%, largely due to a hiring with “a specific customer,” which the company doesn’t name. Last June, Dunkin’ said the Beyond Sausage Breakfast Sandwich would be available at several hundred locations, down from more than 9,000 when it launched in the US in 2019. The decline in US hospitality was partially offset by an increase in sales of other products.
Beyond Meat’s fast food partnerships have yet to translate into significant sales. Although it has dealings with McDonald’s Corp. and Yum! Brands Inc., the company has not yet received a permanent menu item at any of the chain’s US restaurants.
https://www.independent.ie/business/farming/agri-business/agri-food/beyond-meat-cuts-sales-forecast-as-shoppers-trade-down-41891379.html Beyond Meat lowers sales forecast as buyers trade lower