Beyond Meat revenue falls in first quarter due to weak demand, but company confident in turnaround
Beyond Meat's first-quarter revenue fell nearly 16% due to lower demand for its plant-based burgers, sausages and other meats, but the company expressed optimism that new products and a summer marketing campaign will reinvigorate sales.
“I think this is a business that’s turning the corner,” Beyond Meat President and CEO Ethan Brown said Wednesday during a conference call with investors.
Beyond Meat's U.S. retail sales fell 35% despite discounting as shoppers weary from inflation turned to cheaper alternatives. Brown noted that even animal meat producers like Tyson Foods posted losses in the most recent quarter.
The lone bright spot for Beyond Meat was international food-service sales, which nearly doubled over the same period last year. McDonald's introduced plant-based McNuggets in Germany in February and a double McPlant burger in the United Kingdom and Ireland in January. Both products are co-produced with Beyond Meat.
El Segundo, California-based Beyond Meat reported revenue of $92.2 million for the January-March period. That was slightly higher than the $91.7 million Wall Street forecast, according to analysts polled by FactSet.
The company narrowed its net loss to $59 million, compared to a net loss of $100.5 million in the same period a year ago. Beyond Meat cut 200 jobs last fall and has been slashing manufacturing costs in an effort to achieve cash flow-positive operations in the second half of this year.
The loss, of 92 cents per share, also beat analysts' forecast of a $1.01 per-share loss.
Beyond Meat's shares rose 3% in after-market trading.
Brown said Beyond Meat will launch a marketing campaign and promotions with retailers this summer that will counteract criticism that its products are ultra-processed and unhealthy. He noted that the American Heart Association recently named Beyond Steak a heart-healthy food.
Brown said consumers are confused about the ingredients in plant-based meat products and the process for making them.
“Setting the record straight is a key part of bringing consumers back to the category,” he said.
Brown said Beyond Meat will also launch new products this year — including a revamped burger for the frozen aisle — and will experiment with temporarily dropping prices so they are closer to that of animal meat.
Achieving price parity with animal meat has been Beyond Meat's longtime goal. Brown said the company is getting closer, with its average price per pound down 9% from the first quarter of 2022. But plant-based products are still more expensive. Walmart was advertising Beyond Meat burgers at $7.96 per pound Wednesday; all-natural beef burgers were $6.84 per pound.
“Our goal is not to be a high-priced niche item but to be a major player in the $1.4 trillion global protein market,” Brown said.
The company said it expects full-year revenue of between $375 million and $415 million. That would fall short of the $418 million Beyond Meat made last year. Analysts expect full-year revenue of $390 million.
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