Beyond Meat Stock Jumps as Revenue Came Higher Than Expected

Sales declined 7.8% from a year earlier, but were higher than Wall Street had forecast. Analysts surveyed by FactSet had expected quarterly revenue of $66.7 million with a loss of 89 cents per share.

Beyond Meat said sales at grocery stores declined 23%, primarily driven by a 17% decrease in revenue per pound because of promotional discounts and consumers trading down to cheaper products. Sales volume fell 6.8% from a year earlier despite the discounts.

Sales at restaurants decreased 26% as the volume of products sold plummeted. That is because a promotional campaign at a large fast-food chain in the year-earlier period wasn’t repeated in the latest quarter.

The international market was the only bright spot. Retail sales increased 22% and restaurant sales grew 34% thanks to the introduction of new products and strong sales at a major fast-food chain in Europe.

The net loss was boosted by $95.6 million in noncash charges during the fourth quarter, such as depreciation of fixed assets, the company said.

For 2024, management expects net revenue to fall in the range of $315 million to $345 million, with $70 million to $75 million in the first quarter. Gross margin is expected to be in the mid to high teens, while operating expenses are expected to come in between $170 million and $190 million.

Despite initial excitement, plant-based meat has struggled to break into the mainstream. Sales have been sluggish, while profits are nowhere to be seen.

Inflation has made matters worse because plant-based meat is typically more expensive than protein sources like beef and chicken. People have been reluctant to try out the more costly alternative products as inflation has diminished their spending power.

In a survey conducted by
Mizuho
last year, about one-third of plant-based meat buyers said that environmental reasons were the top factor behind their purchase. Analyst John Baumgartner said that motivation could easily be pushed down the priority list when economic conditions get tough.

Beyond Meat is also facing challenges in terms of public opinion because many consumers are skeptical about the health and environmental benefits of plant-based meats.

The stock has struggled since its peak in 2019, months after Beyond Meat’s initial public offering. At Tuesday’s closing level, the stock had lost 60% of its value over the past 12 months. It was trading at $7.52, about one-third of its IPO price.  

Write to Evie Liu at [email protected]