Beyond Meat (BYND) Q2 Revenue Drops 20%

Beyond Meat (BYND -5.32%), the plant-based meat substitute producer, reported earnings for Q2 2025 on August 6, 2025. It posted GAAP revenue of $75.0 million, significantly below analyst GAAP estimates of $81.8 million, and down 19.6% year-over-year (GAAP). Adjusted EPS (non-GAAP) came in at a loss of $0.40 per share, slightly worse than the expected GAAP loss of $0.38 per share, though an improvement from a $0.53 GAAP loss per share in the prior year. Gross margin (GAAP) dropped to 11.5% from 14.7% in the year-ago period. Management limited its forward guidance to the next quarter only, withdrawing full-year guidance and providing an outlook solely for the upcoming quarter, citing continued volatility in its core markets. The period was marked by weaker-than-expected retail demand and ongoing restructuring as the company worked to address declining volumes and mounting losses.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Business Overview and Success Drivers

Beyond Meat develops plant-based alternatives to animal meat, distributing products in the form of burger patties, sausages, ground beef replacement, and new options like chicken pieces. Its focus is serving retail and foodservice partners around the world. The company differentiates itself through innovation in plant-based protein.

Key to Beyond Meat’s business model is ongoing investment in research and development to refine its main product lines, such as the Beyond IV platform and new launches like Beyond Chicken Pieces. Maintaining competitive pricing and controlling costs are also pivotal, given price pressure from both traditional and plant-based competitors. Business priorities also include expanding retail distribution and foodservice partnerships, brand-building campaigns focused on health benefits, and ensuring a robust, resilient supply chain.

Quarter Review: Segment Performance, Financials, and Events

The period saw a sharp drop in revenue and volumes, with headwinds concentrated in U.S. retail and international foodservice channels. U.S. retail revenue declined 26.7% due to lower sales and fewer distribution points, with management attributing this to weak category demand and reduced distribution points. Volumes declined 24.2% in this segment, reflecting not only consumer hesitancy but also the impact of store resets and product placements shifting from refrigerated to frozen aisles—a disruptive move for Beyond's shelf presence.

International markets also recorded sales setbacks. International retail revenue dropped 9.8%, with volume down 13.1%, while international foodservice net revenues fell 25.8%, as a significant decrease in burger sales to quick-service restaurants was reported. U.S. foodservice was the only bright spot, posting a 6.8% increase in revenue in the U.S. foodservice channel, mainly driven by higher sales of ground beef substitutes and dinner sausage products.

Margins deteriorated during the period. Gross margin (GAAP) dropped to 11.5%, a decrease of 3.2 percentage points compared to Q2 2024. This was caused by a higher cost of goods sold per pound, partly due to declining sales volume and increased inventory charges. Operating margin (GAAP) declined to negative 51.8%, while adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) losses widened by 13.0% to $26.0 million compared to the year-ago period. Non-routine charges, including $1.7 million in China operations shutdown and $4.5 million in legal costs, weighed on results. A headcount reduction of 44 jobs (around 6% of the workforce) was also undertaken in August 2025, estimated to result in annual cash compensation expense savings of $5.0–6.0 million over the next twelve months but requiring $0.8–$1.3 million in upfront restructuring costs, with the majority expected to be incurred in Q3 2025.

The company continued its focus on innovation, citing ongoing work on the Beyond IV platform and the national rollout of Beyond Chicken Pieces, and R&D expenses remained relatively stable at $5.8 million. While Beyond's health-focused and “Real People, Real Results” marketing campaigns continued, these brand-building efforts did not translate into increased demand, as acknowledged by management in the release: “We are disappointed with our second quarter results, which primarily reflect ongoing softness in the plant-based meat category, particularly in the U.S. retail channel and certain international foodservice markets.”

Looking Ahead: Guidance, Balance Sheet, and Key Considerations

Management declined to give full-year guidance for fiscal 2025, reiterating “an elevated level of uncertainty within its operating environment,” Only a narrow next-quarter guidance range of $68–$73 million in GAAP revenue was provided, implying expectations for continued sequential and year-over-year declines. The long-term goal remains reaching EBITDA break-even on a run-rate basis by the end of 2026, but the path is challenged by persistent category demand weakness, deteriorating margins, and falling volumes, as reflected by a 19.6% year-over-year decrease in net revenues, a decline in gross margin from 14.7% to 11.5%, and an 18.9% decrease in volume of products sold.

The company’s liquidity picture reflects rising risks. Cash and equivalents stood at $117.3 million. Net cash used in operations (GAAP) for the first six months of FY2025 reached $59.4 million, up from $47.8 million in the first six months of 2024, as cash burn continues. Debt totaled $1.2 billion, mostly in convertible notes and new high-interest term loans. Beyond Meat does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.