Beyond Meat, which makes meat from plants, said that its third-quarter revenue dropped 22.5% due to lower sales.
For the period July to September, net revenue for El Segundo’s California company was $82.5million. Analysts polled at FactSet found that this figure was much lower than Wall Street’s forecast of $93.6 millions.
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Beyond Meat shares plunged to a 52-week lowest of $11.56 and closed at $11.82 Wednesday. After Beyond Meat’s third quarter results were released, they continued falling in after-market trade.
Ethan Brown, Beyond Meat’s CEO and President, said that consumers are switching to lower-cost proteins such as chicken due to high inflation. Beyond hamburgers are less popular because they cost $2 per pound more than lean beef burgers.
Brown also stated that there have been more plants-based businesses entering the market. They are now fighting for sluggish sales.
“The current economic environment has not been kind to plant-based meat,”Brown spoke during conference calls with investors.
Brown indicated that he anticipates competitors to consolidate, or even shut down. That’s already happening. Brazilian meatpacker JBS shut down Planterra Foods in the United States last month. It was a plant-based meat company.
Brown explained that Beyond Meat will also be refocusing its efforts on its own business. The company has reduced operating expenses by 23% since the first quarter and has laid off 240 people — or more than 20% of its global workforce — since August.
Brown stated that Beyond Meat will reduce its partnership to the most lucrative and increase its marketing efforts to market to customers over 60. The core products, such as burgers or sausages, are being refreshed.
Brown explained that Beyond Meat is working to decrease inventory and distribute its manufacturing so it can make the most of its assets. He reiterated Beyond Meat’s goal of achieving positive cash flow in its operations by the second half of next year.
“It’s a pivot from ‘growth above all’ to ‘cash flow positive and sustainable growth,’”He stated.
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Beyond Meat’s U.S. food service sales rose 5.6% in the third quarter as partners like Panda Express expanded the rollout of plant-based chicken. U.S. retail sales dropped nearly 12%. International revenues also declined as Beyond Meat cut its prices and because the strong dollar hurt foreign profits.
The company’s net loss nearly doubled to $101.7 million for the quarter. Analysts had predicted a loss of $1.15 per share. The company’s loss was $1.60 more than it actually was.
This article was contributed by the Associated Press
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