Dive briefs:
- Beyond Meat met revenue expectations Fiscal 2022 net revenues of $418.9 million are within the projected range of $400 million to $425 million. Management said it has been disappointing for more than a year, which shows its strategy for positive growth is working.
- The company posted fourth-quarter net revenue of $79.9 million, down 20.6% from the prior year. During this period, Beyond Meat reported his net loss of $66.9 million. compared to $80.4 million a year agoThe company reaffirmed its expectations of being cash flow positive by the second half of the year.
- Plant-based meat has suffered over the past year and a half as consumers have been unwilling to buy often more expensive substitutes. This predicament is embodied in sluggish growth and widening losses.
Dive Insight:
The Beyond Meat problem isn’t over yet, but the drastic measures taken last quarter are finally starting to pay off.
Food companies typically compare each quarter’s results to the same period last year, but management said in a conference call with analysts on Thursday that sales figures, including operating expenditures, gross margins, and consumer purchase frequency and repeat purchases, were reported. He pointed out that several financial indicators, such as, have all improved. compared to the company’s previous earnings report in November.
These were primarily brought about by cutting operating costs by reducing headcount and the number of co-packers the company works with, reducing inventories by 17% throughout the financial year, and cutting back on marketing.
CEO Ethan Brown said on an earnings call that Beyond Meat is working to move from a “growth above all” strategy to what it describes as a “sustainable long-term growth model.”
“I am confident that efforts done properly will yield enormous benefits over time,” he said. “We are showing clear and meaningful early progress.”
Investors applauded the results, pushing Beyond Meat’s shares up about 20% in intraday trading on Friday.
However, there are still quite a few hills to climb. The amount of plant-based meat the company sold last quarter was down significantly from last year, especially in the US. Grocery store sales he decreased by 22.5% and food service volume he decreased by 25.4%.
Brown said he understands the challenges of the current consumer goods environment.
One of the biggest problems facing the entire plant-based meat sector is high prices. While the segment’s newness means costs are a bit higher, price parity has been a goal for the plant-based meat company, and Brown says he expects at least one of the company’s products to be on par by 2024. I set a goal to said before that the company is doing well.
Although he didn’t mention the price parity target again on Thursday, Brown said Beyond Meat has been conducting some limited testing of price cuts and has seen encouraging results. The story is largely overlooked in an analysis that analyzed the drop in plant-based meat sales as overall inflation surged over the past year and a half, which doesn’t take into account the relatively high prices.
“To make people think we’re just trying to get over it [period of inflation] With a product that costs literally double the cost of the next available alternative that has been consumed for thousands of years, you think I’m naive, right?” Brown said on the phone. “So we will get through this period of inflation. will see growth again.”
Analysts were encouraged by the earnings report but remained skeptical. Brian Holland, Managing Director and Senior Research Analyst at Cowen, said in a note on earnings: [are] We believe that difficult macros make it more difficult to induce consumer trials. “
