Beyond Meat Inc. fell in late trading after the plant-based burger company said it’s unlikely to hit its goal of becoming cash-flow positive in the second half of the year. The company also trimmed its sales outlook.
The maker of the Beyond Burger has struggled to maintain consumer interest amid high prices and questions about its products’ taste and texture. It has vowed to revamp its business and adapt to changing conditions, but ongoing weakness in the US is proving challenging for the company.
The stock fell 8.4% at 4:30 p.m. in late trading in New York on Monday. The shares had gained 24% this year through Monday’s close.
“With respect to the company’s previously stated target of achieving cash-flow positive operations within the second half of 2023, in light of greater-than-expected consumer and category headwinds and their anticipated impact on net revenues, the company now believes this is unlikely to be met in the stated timeframe,” Beyond Meat said in a statement.
Management remains focused on “achieving cash flow positive operations” by reducing costs. It expects “meaningfully reduced cash consumption” for the rest of 2023.
Second-quarter revenue of $102 million fell short of the average estimate compiled by Bloomberg. The company reported weakness in the US market and trimmed its 2023 revenue outlook to a range of $360 million to $380 million, down from a previous range of as much as $415 million.
Chief Executive Officer Ethan Brown said Beyond Meat expects “modest” sales growth in the third and fourth quarters from a year earlier.
Beyond is being hit by a broader slump in the category of plant-based meat: By volume, sales of refrigerated meat alternatives slid 22% in the 52 weeks ending July 16 from the same period a year earlier, according to market-data tracker Circana. Frozen meat alternatives fell 10% by the same measure.
The company has slashed costs by laying off workers and trimming operational costs amid dwindling cash. As of July 1, the company had $211 million of cash on hand — down from the $259 million reported the previous quarter.
In the US, sales fell in both retail and foodservice, despite some increased discounts and less product being sent to liquidation. The company cited “weak overall demand” for the drop in foodservice sales.
International sales remained a bright spot, outpacing analysts’ estimates. International foodservice posted a 19% increase in volume of products sold, thanks to fast-food customers in Europe, the company said.
(Updates share trading and adds details)
