Beyond Meat reported better than expected projections for the current fiscal year. This included double-digit gross margins. It indicated that the group was making good progress in its efforts stop haemorrhaging money.
Investors were alarmed last year by the company’s negative gross margins in the second quarter. It also cut its revenue outlook due to a decline in demand for meat substitutes and rising production costs.
Beyond Meat stated that it aimed to be cash flow positive in 2023’s second half and expects revenues between $375mn to $415mn, as opposed to $418.9mn in 2022. It forecasted a gross margin of “low double-digits”.
The full-year 2022 results were better than expected with revenues falling 0.8% from the prior year to $418.9mn, and a negative gross profit of 5.7% compared to consensus estimates that $414.6mn in revenue and gross margins of 6.4%.After soaring to $239 in 2019, the shares of the California company fell to $11.34 in December. However, after IPO in 2019, they soared to $19.38 in after-hours trades.
Beyond Meat’s chief executive officer, Ethan Brown, stated that the company was making progress on margin recovery, operating expense reduction, as well as continued inventory drawdown.
After being forced to change its “growth above everything” strategy, the faux-meat group cut 240 jobs or 20% of its workforce and reduced the number of manufacturers that were contracted to produce its products from eight to 3.
The company stated that the business still consumed “quite some cash”, and it was working to reduce these levels.
The sales boom in 2020 has seen a slowdown in the growth of plant-based meats sales. This was due to fewer repeat purchases from consumers. Analysts and industry executives said that the high price of this category amid the current cost-of-living crisis turned consumers off. Many of the products failed to live up their claims that they were as delicious as real meat, and shoppers did not repurchase them.
The entire industry has been affected by the slowdown in demand growth. Impossible Foods informed the California state labor department earlier this month that it would be cutting 132 jobs. Based on data from PitchBook, this amounts to approximately 16 percent of the company’s total workforce. Bloomberg originally reported that the cuts were across-the-board and included science and research positions and director-level jobs.
JBS, a major meat company based in Brazil, shut down its US plant-based meat business Planterra last year, while Maple Leaf, Canada, reduced its venture.