Beyond Meat revenue drops as it cuts prices to boost demand
Plant-based meat maker Beyond Meat said its revenue fell 22.5% in the third quarter as it cut prices in the face of weaker demand. The $82.5million net revenue for the July-September period was reported by The El Segundo-based company. According to FactSet analysts polled, this was significantly lower than the $93.6million Wall Street had predicted.
Beyond Meat shares fell to a 52-week low of $11. 56 before closing at $11. 82 Wednesday. After Beyond Meat’s third quarter results, they continued to fall in after-market trades. Ethan Brown,
Beyond Meat CEO and President, stated that consumers have switched to cheaper proteins such as chicken due to high inflation. Beyond burgers are less popular because they cost $2 more per pound than lean beef burgers.
At a similar time, Brown stated that more companies are entering the plant-based market, which has led to dwindling sales.
“The current economic environment has not been kind to plant-based meat,” Brown said during a conference call with investors.
Brown stated that he expects that some competitors will consolidate, or close down. This is already happening. Brazilian meatpacker JBS shut down Planterra Foods, its U.S. plant based meat business, last month.
But Brown stated that Beyond Meat is also working to turn around its business. The company has reduced operating expenses by 23% since the first quarter and has laid off 240 people — or more than 20% of its global workforce — since August.
Brown stated that Beyond Meat will reduce its profit margins and improve its marketing to promote environmental benefits and health benefits for older customers. The core products, such as burgers and sausage, are receiving refreshes. Brown stated that the company is also working to reduce inventory and redistribute its manufacturing to make more use of its facilities. Brown reiterated Beyond Meat’s goal to achieve positive cash flow in its operations within the second half next year.
“It’s about a pivot from growth above all to cash flow positive and sustainable growing,’ he stated.
Beyond Meat saw its U.S. food services sales rise 5.6% in the third quarter, as partners like Panda Express increased the rollout plant-based chicken. But U.S. retail sales fell nearly 12%. International revenue also declined as Beyond Meat reduced prices and the strong dollar weakened foreign profits.
The company’s net loss almost doubled to $101.7million for the quarter. The loss was $1. 60 per share was also higher than $1. 15 per-share loss analysts had forecast.
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