Beyond Meat Inc (NASDAQ:BYND) told investors it is undertaking significant cost-cutting measures including reducing its headcount as its expected return to modest growth during the third quarter did not eventuate on continued weak demand for plant-based proteins.
The company plans to reduce its non-production workforce by about 65 employees or 19%, about 8% of its total workforce, which will result in about $9.5 million to $10.5 million in savings, it said on Thursday.
Other steps being taken by Beyond Meat to improve its cost structure are reviewing its pricing strategy, using inventory management to reduce working capital, intensifying its focus on catergories and geographies exhibiting revenue growth, and countering misinformation about its products in the United States.
Ahead of its third quarter earnings report next week, the company issued select preliminary results.
It said it expects to report revenue of $75 million, missing estimates of about $90 million, and gross profit of $7 million to $8 million, noting that weaker-than-expected US retail and food service challenges, lower than anticipated promotional effectiveness, and unfavourable changes in product sales mix dragged on its performance.
Beyond Meat also lowered its 2023 sales outlook to $330 million to $340 million, a decline of 21% to 19% over the previous year, from its previous guidance range of $360 million to $380 million.
Analysts had expected 2023 sales of $370.22 million.
“We anticipated a modest return to growth in the third quarter of 2023 that did not occur, reflecting further sector-specific and consumer headwinds,” Beyond Meat CEO Ethan Brown said in a statement.
“Even as we implement measures to address those headwinds that are within our sphere of influence, we intend to pursue a further, sizable reduction of operating expenses to improve our cost structure.”
Despite the company’s 3Q earnings warning, investors were impressed by the company’s cost-cutting plan and sent shares of Beyond Meat almost 18% higher at noon on Thursday. The stock had gained 17.7% at US$6.95.
Beyond Meat's 3Q results are due on Wednesday, November 8.
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