As decreasing demand for its more expensive plant-based meat products shows no signs of recovery, Beyond Meat lowered yearly revenue prediction and missed second-quarter net sales estimates, sending shares down 8% in extended trading on Monday.
Customers are choosing cheaper animal protein over alternatives like plant-based goods as a result of inflationary pressures.
In a post-earnings call, CEO Ethan Brown stated that the uncertainty around the health advantages of plant-based meat is a factor in growth.
"This change in perception is not without encouragement from interest groups who have succeeded in seeding doubt and fear around the ingredients and process used to create our and other plant-based meats," he added.
Offering its key goods at a price that is equal to or less than that of their animal protein equivalent, Beyond Meat has been "testing" price reductions in an effort to draw customers.
In contrast to its earlier projection of $375 million to $415 million, the business now expects 2023 sales to range between $360 million and $380 million.
According to Beyond Meat, it is improbable that the company would achieve cash flow positive operations by the second part of 2023.
"The guidance cut is disappointing, especially considering the decent start to the year. We are now back to talking about cash burn and the need to raise capital... Something needs to change to prevent this ship from sinking," said CFRA Research analyst Arun Sundaram.
According to Refinitiv statistics, Beyond Meat's quarterly net revenue decreased by over 31% to $102.1 million, falling short of analysts' average projection of $108.4 million.
The company did, however, register a smaller-than-expected loss of 83 cents, compared with projections of 86 cents, thanks to lower supply chain charges and its efforts to control costs.
The corporation had announced in October that it would eliminate positions, which was anticipated to result in annual savings of around $39 million.
(Source:www.thestar.com)
Customers are choosing cheaper animal protein over alternatives like plant-based goods as a result of inflationary pressures.
In a post-earnings call, CEO Ethan Brown stated that the uncertainty around the health advantages of plant-based meat is a factor in growth.
"This change in perception is not without encouragement from interest groups who have succeeded in seeding doubt and fear around the ingredients and process used to create our and other plant-based meats," he added.
Offering its key goods at a price that is equal to or less than that of their animal protein equivalent, Beyond Meat has been "testing" price reductions in an effort to draw customers.
In contrast to its earlier projection of $375 million to $415 million, the business now expects 2023 sales to range between $360 million and $380 million.
According to Beyond Meat, it is improbable that the company would achieve cash flow positive operations by the second part of 2023.
"The guidance cut is disappointing, especially considering the decent start to the year. We are now back to talking about cash burn and the need to raise capital... Something needs to change to prevent this ship from sinking," said CFRA Research analyst Arun Sundaram.
According to Refinitiv statistics, Beyond Meat's quarterly net revenue decreased by over 31% to $102.1 million, falling short of analysts' average projection of $108.4 million.
The company did, however, register a smaller-than-expected loss of 83 cents, compared with projections of 86 cents, thanks to lower supply chain charges and its efforts to control costs.
The corporation had announced in October that it would eliminate positions, which was anticipated to result in annual savings of around $39 million.
(Source:www.thestar.com)
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