Beyond Meat cuts sales forecast as consumers avoid more expensive fake meat

Products from Beyond Meat Inc, the maker of vegan burgers, are displayed for sale at a market in Encinitas, California, U.S., June 5, 2019. REUTERS//File Photo

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Aug 4 (Reuters) – Beyond Meat Inc (BYND.O) on Thursday lowered its full-year revenue forecast and announced job cuts as rising inflation hurt the company’s efforts to return its meat more expensive vegetable more affordable for consumers.

Rising prices for plant-based meat have slowed the category’s growth as people prefer lower-priced chicken and beef, Beyond Meat’s chief executive Ethan Brown said on an earnings call.

The second quarter saw a sequential contraction in plant-based meat penetration in U.S. households for the first time in more than four years, Brown said, citing data from Numerator.

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Beyond Meat now forecasts revenue of $470-520 million in 2022, up from $560-620 million previously. Analysts had expected revenue of $559.4 million, according to Refinitiv data.

“(The reduction in guidance) calls into question the duration of Beyond Meat’s liquidity to fund its future growth. The pressures on the model are only intensifying,” Oppenheimer analyst Rupesh Parikh said.

The company’s cash and cash equivalents balance was $454.7 million at the end of the second quarter. Net cash used in operating activities was $235.7 million for the first half of the year.

Beyond Meat also said it would aim to cut operating expenses, after its loss of $1.53 per share for the second quarter was much larger than analysts’ expectations of $1.18.

To record nearly $8 million in annualized savings, Beyond Meat said it would cut about 4% of its global workforce. It had 1,108 full-time employees and 311 full-time contractors, as of the end of 2021.

Net sales also fell 1.6% to $147 million for the second quarter, missing estimates of $149.2 million, as it had to lower prices in parts of Europe to eliminate excess inventory.

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Reporting by Praveen Paramasivam in Bengaluru; Editing by Maju Samuel and Anil D’Silva

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