Beyond Meat Identifies Three ‘Building Blocks’ for Transformation As Losses Mount

Beyond Meat is feeling the heat on Wall Street after reporting yet another bleak quarter.

In the third quarter ended September 27, net revenues slid 13.3% year-over-year to $70.2 million, driven by a double-digit decrease in volume of products sold due to softer consumer demand, reduced points of distribution in the U.S. retail channel and lower sales of burger products to quick-service restaurant (QSR) customers.

In the report, CEO Ethan Brown said the El Segundo, Calif.-based company has achieved “three important building blocks” this year as part of its transformation efforts: a reduction in overall leverage in connection with the exchange of 2027 convertible notes, an extension of debt maturity and the addition of “substantial” liquidity to its balance sheet.

“We are taking equally strong measures to accelerate our path to sustainable operations, including pursuing further and sizable cost reduction, gross margin expansion investments and targeted strategic growth initiatives,” said Brown, adding that the company is closing out the year with a “much improved” balance sheet.

But the losses are still mounting. In the quarter, Beyond Meat posted a net loss of $110.7 million, compared to $26.6 million last year.

The sole bright spot in Beyond Meat’s third quarter was its international foodservice channel, which saw revenues increase 2.3% to $15.3 million. The growth was primarily attributable to an increase in the volume of products sold.

Once a darling of the plant-based sector, Beyond Meat’s stock has plunged from $25 per share in its initial public offering in 2019 to a measly $1.22 per share as of November 11. Its stock has been on a rollercoaster ride over the past few weeks, trading at $6.30 per share on October 22, driven by its inclusion in the Roundhill Investments meme ETF and expanded distribution with Walmart.

Following the end of the third quarter, Beyond Meat announced an early settlement of an exchange offer with bondholders to help reduce its debt, which currently stands at $1.2 billion. It plans to issue approximately $208.7 million in new convertible notes, due in 2030, and around 316 million shares of common stock.

As part of its broader recovery strategy, Beyond Meat announced in August plans to drop the second half of its name to reframe itself as a protein business rather than a meat alternative company. The realignment was spurred by years of slumping sales, lawsuits and a general downturn in demand for plant-based meat analogs.

The company’s transformation efforts also include the previously announced reduction of its North America workforce. The job cuts will affect approximately 44 employees and, over the next year, Beyond Meat believes the workforce reduction will result in roughly $5 million to $6 million in cash compensation expense savings.

Looking ahead, Beyond Meat expects fourth-quarter net revenue to be between $60 million and $65 million.

“The company continues to experience an elevated level of uncertainty within its operating environment, which has, and management believes could continue to have, unforeseen impacts on the company’s realized results,” the company said in its earnings report.