- Oops!Something went wrong.Please try again later.
(Bloomberg) -- Beyond Meat Inc. slashed its revenue outlook for the full year, saying that shoppers are trading down from its plant-based options to cheaper animal proteins.
Most Read from Bloomberg
The shares, which have lost about 50% of their value so far this year, fell 1.1% at 5:32 p.m. in late New York trading.
The maker of plant-based burgers is in a race to increase output and bring new products to the market -- an expensive process that has raised concerns about whether its pace of spending is sustainable. At the same time, the company faces volatile demand for its relatively high-priced products as inflation erodes purchasing power. The company said gross profit was negative, partially because of liquidating slow-selling products.
“Today’s inflationary pressure is a significant concern for the plant-based meat industry,” said Shoggi M. Ezeizat, a consumer stocks analyst at Third Bridge. “Flexitarians could easily switch back to lower-cost animal protein as they seek to reduce their discretionary spend.”
In a call with analysts, Chief Executive Officer Ethan Brown acknowledged that consumer buying patterns have shifted away from plant-based meat. His company now sees sales in a range of $470 million to $520 million for the full year. That’s down from the previous range of $560 million to $620 million. Second-quarter sales of $147 million also missed Wall Street’s estimates.
Beyond Meat had $455 million in cash and cash equivalents on hand at the end of the quarter ended July 2, compared to the $548 million it had at the end of the first quarter.
Cash used in operations during the period was $70.5 million -- down from the $162.5 million it burned in the first quarter. The company had $1.1 billion in outstanding debt at the end of the quarter.
The company said it is reducing its workforce by about 4%, confirming a report Wednesday by Bloomberg News. The move is expected to generate annual savings of about $8 million, although it said severance costs will total $1 million.
International foodservice sales provided a bright spot, with a 7% rise mostly driven by higher volume. Consumers overseas have proved to be more amenable to substituting meat for alternative products than Americans have been.
US foodservice net revenues fell 2.4%, primarily due to a discontinuation with “a certain customer” that the company does not name. In June last year, Dunkin’ said the Beyond Sausage Breakfast Sandwich would be available at several hundred locations, a reduction from its 2019 rollout at more than 9,000 across the U.S. The US foodservice decline was partially offset by an increase in sales of other products.
Beyond Meat’s fast-food partnerships have yet to pay off in any meaningful sales. Although it has deals with both McDonald’s Corp. and Yum! Brands Inc., the company has yet to land a permanent menu item at any of the chains’ US restaurants.
(Updates share trading and adds analyst quote.)
Most Read from Bloomberg Businessweek
©2022 Bloomberg L.P.