AP – Plant-based meat maker Beyond Meat said its revenue fell 22.5 per cent in the third quarter as it cut prices in the face of weaker demand.
The El Segundo, California-based company reported net revenue of USD82.5 million for the July-September period. That was far lower than the USD93.6 million Wall Street had forecast, according to analysts polled by FactSet.
Beyond Meat shares fell to a 52-week low of USD11.56 before closing at USD11.82 on Wednesday. They continued to fall in after-market trading after Beyond Meat released its third quarter results.
Beyond Meat President and CEO Ethan Brown said consumers have been switching to cheaper proteins like chicken because of high inflation. That hurts demand for products like Beyond burgers, which cost about USD2 more per pound than lean beef ones.
At the same time, Brown said, more companies have been entering the plant-based market, leaving them fighting over dwindling sales.
“The current economic environment has not been kind to plant-based meat,” Brown said during a conference call with investors.
Brown said he expects some competitors will consolidate or shut down. That’s already happening. Last month, Brazilian meatpacker JBS closed Planterra Foods, its United States (US) plant-based meat business.
But Brown said Beyond Meat is also focussing on turning around its own business. The company has reduced operating expenses by 23 per cent since the first quarter and has laid off 240 people – or more than 20 per cent of its global workforce – since August.
Brown said Beyond Meat plans to pare its partnerships to its most profitable ones and sharpen its marketing to promote health benefits to older customers and environmental benefits to younger ones. Core products like burgers and sausage are getting refreshes.
The company is also reducing inventory and redistributing its manufacturing to make better use of its facilities, Brown said. He reiterated Beyond Meat’s goal of achieving positive cash flow in its operations by the second half of next year.
“It’s a pivot from ‘growth above all’ to ‘cash flow positive and sustainable growth,’” he said.
Beyond Meat’s US food service sales rose 5.6 per cent in the third quarter as partners like Panda Express expanded the rollout of plant-based chicken. But US retail sales fell nearly 12 per cent. International revenue also fell as Beyond Meat cut prices and the strong dollar weakened foreign profits.
The company’s net loss nearly doubled to USD101.7 million for the quarter. The loss, of USD1.60 per share, was also higher than the USD1.15 per-share loss analysts had forecast.