Beyond Meat Inc (NASDAQ:BYND) after Wednesday’s closing bell reported third-quarter earnings that missed estimates on demand weakness for its plant-based meat products in the United States.
The company reported 3Q revenue of $75.3 million, down 8.7% year over year due to increased trade discounts and changes in product sales mix.
US retail revenue decreased 33.9% to $30.5 million due to an 18.8% decrease in volume, which Beyond Meat said reflected weak category demand.
It also reported a wider-than-expected loss. It narrowed its loss year over year from $101.7 million or $1.60 per share to $70.5 million or $1.09 per share, which missed analyst estimates of a loss per share of $0.83.
The company also downwardly revised its full-year outlook, now expecting revenue in the range of $330 million to $340 million, which represents a decline of 21% to 19% over 2022, and approximately even gross profit.
One positive during the quarter was strong demand for meat alternatives in Europe. Beyond Meat’s international retail sales rose 39% and its international food service sales were up 79%, attributed to demand for the company’s plant-based meats at fast food chain McDonald’s.
“Though we are encouraged by pockets of growth, particularly in the European Union (EU) where we saw double-digit gains in net revenues on a year-over-year basis, we are disappointed by our overall results as we continue to experience worsening sector-specific and broader consumer headwinds,” Beyond Meat CEO Ethan Brown said.
The company last week announced it is reviewing its operations to identify cost-cutting opportunities, including reducing its global headcount by about 8%, resulting in savings of $9.5 million to $10.5 million.
Brown told investors on the company’s earnings call on Wednesday evening that this could include the potential exit of certain product lines, optimization of its manufacturing capacity and its real estate footprint and reviewing its pricing strategy.
“As we look to 2024, we expect to implement a more nuanced pricing strategy, keeping certain programs and pricing in place, while adjusting others in support of gross margin expansion,” he said.
Investors appeared impressed by Beyond Meat's cost-cutting plan and its opportunities in non-U.S. markets, sending the stock 12.2% higher to US$7.43 shortly after Thursday’s opening bell.
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