What happened
Shares of Beyond Meat (BYND 4.87%) fell by 23.7% in August, according to data provided by S&P Global Market Intelligence.
This fall extends the year to date decline of the plant-based meat producer to 62.4%.
Image source: Getty images.
So what
Beyond Meat released a disappointing set of earnings for its fiscal 2022's second quarter (2Q2022) that not only saw revenue dip year over year but also saw the company report a significantly higher net loss. Net revenue for Q2 came in at $147 million, down 1.6% year over year, with the drag coming mainly from its international retail division. In contrast, Q2 2021 saw revenue jump 32% year over year. Beyond Meat also reported a gross loss of $6.2 million for Q2 while its net loss ballooned nearly fivefold from $19.6 million to $97.1 million.
These numbers show growth is all but over for the company as it struggles to drum up interest in its high-priced products. CEO Ethan Brown has commented that customers are trading down to cheaper plant-based meat products or switching to animal meat as high inflation crimps their spending power. The company's plant-based ground beef costs around 70% more per pound compared to animal-based ground beef.
Investors were probably also concerned over Beyond Meat's downward revision of its 2022 guidance. The previous expectation for sales of $560 million to $620 million has now been reduced to $470 million to $520 million, for growth of between 1% to 12% year over year.
Now what
Despite the weaker results, Beyond Meat continues to ink partnerships to expand its geographic reach. Earlier this month, it collaborated with one of Japan's largest grocery companies, United Super Market Holdings, for exclusive distribution rights to the company's products and to use its meat in new products specially developed for the Japanese market.
Notwithstanding this success, Beyond Meat had to slash 4% of its workforce as a cost-saving measure to cope with reduced demand for its products. This move will help the company save $8 million per year and help stem some of the cash burn.
