Beyond Meat announced better-than-expected forecasts for the current year, including double gross profit, suggesting the group is making progress in its efforts to stem the bleeding.
The plant-based meat company surprised investors last year when gross profit turned negative in the second quarter and lowered its revenue outlook as people shunned meat substitutes and production costs rose.
Beyond Meat said that it aims to be cash flow positive in the second half of 2023, and its profit is expected to be between $375 million and $415 million, compared to $418.9 million for 2022. range”.
Full-year 2022 results were also better than expected, with revenue down 0.8 percent from the previous year at $418.9 million and gross profit negative 5.7 percent compared to consensus estimates of $414.6 million in revenue and gross profit negative 6.4 percent each. sen.
Shares of the California company, which fell to $11.34 in December after rising to $239 after its IPO in 2019, rose 13 percent in after-hours trading to $19.38.
Ethan Brown, Beyond Meat’s chief executive, said the company was making “progress on margin recovery and operating cost reductions, and continued inventory reductions”.
This comes after it was forced to shift its “growth above all” strategy to one that prioritizes cash flow by cutting costs and targeting growth areas in October. The fake meat group is cutting operating costs by 36 percent by 2022, including cutting 240 jobs, or 20 percent of its workforce, and reducing the number of manufacturers it contracts to make its products from eight to three.
However, the company said the business was still consuming “a lot of money” and added measures to reduce the rate.
Since sales boomed in 2020, growth in plant-based meat sales stalled last year, as repeat purchases by consumers declined. Industry executives and analysts say consumers are being turned off by the category’s typically high prices amid a cost-of-living crisis. Shoppers also fail to repurchase many products that don’t quite fit the bill as delicious as real meat.
Weakness in demand growth has affected all industries. Earlier this month Impossible Foods told the California state labor department it was cutting 132 jobs. That equates to about 16 percent of the total workforce, based on figures from data firm PitchBook. The job cuts, reported by Bloomberg, include director-level jobs and science and research roles.
Last year JBS, a leading meat group headquartered in Brazil, closed its US plant-based meat business Planterra, while Canada’s Maple Leaf downsized its business.