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Beyond Meat (BYND) earnings for the fourth quarter of 2022

Beyond Meat (BYND) earnings for the fourth quarter of 2022

Vegan sausages from Beyond Meat Inc, maker of plant-based burgers, are for sale at a market in Encinitas, Calif., June 5, 2019.

Mike Blake | Reuters

Beyond Meat on Thursday reported a smaller-than-expected loss for the fourth quarter, despite a more than 20% drop in sales.

Shares of the company were up 14% in after-hours trading.

Here’s what the file is The company reported Compared to what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Loss per share: $1.05 vs. $1.18 expected
  • Revenue: $79.9 million vs. $75.7 million expected

For the fourth quarter, Beyond reported a net loss of $66.9 million, or $1.05 per share, narrower than a net loss of $80.4 million, or $1.27 per share, a year ago.

Chief Executive Officer Ethan Brown said the company’s margins improved by 14 percentage points, helped by reducing its co-manufacturing footprint and better managing staffing levels.

Net sales It fell 20.6% to $79.9 million. Beyond said the total pounds of meat alternatives it sold decreased 16.9% in the quarter. The company said demand for meat alternatives across “all channels” remains weak. In response, it offered its products at discounts to entice inflation-weary customers. Beyond’s net revenue per pound decreased 4.4% in the quarter.

US sales fell 20.9% as the company saw demand decline in its grocery and foodservice segments. Similarly, outside the US, Beyond reported a 19.9% ​​decline in revenue, helped by a sharp decline in grocery sales.

The company expects its sales to contract further in 2023.

Beyond expects its 2023 revenue to range from $375 million to $415 million, representing a 1% to 10% decrease in sales. Wall Street had expected annual revenue to range from $322 million to $496 million.

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Rather than increasing sales, Beyond’s primary business goal is to generate positive cash flow in the second half of 2023. Its gross margins are expected to be low double-digits and increase sequentially throughout the year.

Beyond — and the broader alternative meat category — has been struggling for more than a year and a half, despite seeing surging demand in the early days of the pandemic. Customers who tried expensive meat alternatives didn’t stick with the products, especially since inflation drove up grocery prices.

“We believe that persistently high inflation, a slowing economy, increased competition and commercial behavior by consumers among proteins are all negatively impacting our category and brand growth, but we believe this is temporary,” CFO Lupe Kotua said of the company. Conference call on Thursday.

In response, Beyond has shifted from its initial strategy of “growth above everything,” according to Brown, to focus on conserving cash, reducing inventory, and striving for profitability. Last year, it completed two rounds of layoffs, cutting more than a fifth of its workforce. The company also plans to restructure the operating activities of Beyond Jerky, which is part of its joint venture with PepsiCo.

Others in the vegetarian meat category have had to make similar decisions as demand has dried up. Impossible Foods It said It laid off 20% of its staff after laying off 6% of workers last year. Kellogg has canceled plans to spin off and possibly sell its plant unit, which includes Morningstar Farms.