Beyond Meat Plans For Cost Cuts, 19% Workforce Reduction
Soft sales in the plant-based meat category continue to batter Beyond Meat’s revenue in Q3, according to president and CEO Ethan Brown, as the company reported a loss of between about $7 million to $8 million in gross profit despite earning $75 million in net sales.
“We anticipated a modest return to growth in the third quarter of 2023 that did not occur, reflecting further sector-specific and consumer headwinds,” said Brown, in a statement for the release of a “select” earnings report earlier today. “Even as we implement measures to address those headwinds that are within our sphere of influence, we intend to pursue a further, sizable reduction of operating expenses to improve our cost structure.”
The company did achieve a milestone – notching a period of positive free cash flow of about $7.6 million in Q3. However, according to the release, the company does not expect to be able to maintain cash flow positive operations through Q4. Brown attributed the results to weak sales volume in both retail and foodservice as well as a lower-than-anticipated volume boost from flat-fee promotional programs.
On a product level, Beyond said its core products including Beyond Burger, Beyond Beef, and Beyond Sausage saw weaker than expected sales relative to non-core offerings like Beyond Steak, Beyond Chicken Tenders, Beyond Popcorn Chicken, and Beyond Chicken Nuggets.
In response to these results, Beyond is implementing five cost savings initiatives, starting with a 19% reduction to its global non-production workforce. The company will also review its pricing strategy, reduce working capital expense through inventory management, focus efforts on high-turning channels and geographies, and work to counter misinformation about the plant-based category through its portfolio and marketing efforts.
Beyond also updated its full-year outlook and now expects net revenue to drop approximately 21% to 19% year-over-year to range between $330 million to $340 million. Gross profits are now expected to breakeven.
The company will release full financial results and hold a conference call on November 8.
