Beyond Meat (BYND) on Thursday reported fiscal fourth-quarter and full-year 2022 results that slightly beat Wall Street estimates, pushing shares up more than 15% in aftermarket trading.
The plant-based protein giant saw a 20.6% drop in year-over-year revenue in the fourth quarter as it canceled last year’s trials with fast-food giants like KFC and McDonald’s. Full-year 2022 revenue fell 9.8% to $418.9 million. However, CEO Ethan Brown said the brand is “making solid progress” in its “transition to a sustainable growth model, which focuses on achieving cash flow positive operations in the second semester 2023”.
Here’s what Beyond Meat reported, compared to Wall Street estimates, according to Bloomberg Consensus Estimates:
Beyond Meat is focused on its three main pillars, Brown said, including driving margin recovery and reducing operating expenses, reducing inventory levels while generating cash flow, and putting “more focus on near-term retail and foodservice growth drivers while supporting long-term partner strategy and key opportunities.
In late October, Beyond Meat announced plans to cut spending and target treasury operations in the second half of 2023, which coincided with the announcement of a 19% reduction in its workforce.
In the statement, Brown said the fourth quarter results “clearly demonstrate the delivery” of the plan he set out last fall, “including strong sequential progress in recovering margins and reducing business expenses. ‘operation, and a continued reduction in inventory’.
Highlights of the fourth quarter, according to the release, include industry awareness received from innovations like Beyond Steak, in addition to the launch of plant-based McPlant Nuggets in Germany earlier this week. This offer is part of its three-year partnership with McDonald’s (MCD), which is now days away from its two-year anniversary. In September 2021, McDonald’s announced plans to test its first-ever plant-based burger, the McPlant.
In the statement, there was no mention of the status of its partnership with KFC (YUM), Beyond Chicken.
As for retailers, Beyond Meat is currently offered at Kroger (KR), Walmart (WMT), Publix Super Markets, Costco (COST), Whole Foods (AMZN), and Target (TGT).
For the full year 2023 outlook, the company expects net revenue to be between $375 million and $415 million, down 10% to 1% from 2022. Gross margin should be in the double digit range. It expects to incur $250 million in operating expenses, “a bit more weighted towards the first half of the year.”
The company noted “unforeseen impacts” that could impact the company’s results, including “short-term uncertainty related to macroeconomic issues,” such as inflation and rising interest rates, “demand in the plant-based meat category, growing concerns about the likelihood of a recession, increased competition, supply chain disruptions, labor availability challenges implementation and, to a lesser extent, COVID-19 and its potential impact on consumer behavior and demand levels, among others.
It comes as demand for plant-based meat is weaker overall as customers prefer cheaper protein options amid inflation.
Brown said he remains focused on cash-flow-positive operations in the second half of 2023 and the brand’s long-term outlook as it “navigates current conditions.”
He said, “We remain focused on positioning Beyond Meat to capture the vast opportunity to be a major protein supplier to the $1.4 trillion meat industry.”
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Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email him at bdipalma@yahoofinance.com.
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