Beyond Meat (BYND 3.03%) investors have faced several unappetizing earnings reports in 2022, but the most recent one still managed to miss Wall Street's low expectations. The company described collapsing demand as consumers moved away from its plant-based protein products. Net losses ballooned to over 100% of revenue.

Let's take a closer look at management's turnaround plan and why investors might want to watch this execution from the sidelines, rather than purchasing Beyond Meat's stock right now.

The no-good results

Investors came into the Q3 announcement with low expectations. Beyond Meat lowered its 2022 outlook dramatically after its last report, saying it might only grow sales by around 3%, rather than the 21% spike they had been targeting.

It turns out that reduced forecast was too optimistic. Sales in the Q3 selling period that ended in late September suggest a widespread preference shift away from Beyond Meat's plant-based products that had been popular in earlier phases of the pandemic. Sales dove 23% to just $83 million. Volumes were down 13%, even after the company slashed prices by an average of 11%.

As you might expect, the combination of falling volume and declining prices had a brutal impact on the bottom line. Beyond Meat's gross profit margin was negative, and operating losses ballooned to $90 million, or just over 100% of sales, compared to $54 million, or 51% of sales, a year ago.

What went wrong

Management's discussion of what went wrong implies more pain ahead for the business. Consumers aren't willing to pay higher prices for plant-based proteins as inflation pressures their budgets. People aren't feeling adventurous in trying out new flavors and products, such as Beyond Meat Jerky, either.

BYND Operating Margin (TTM) Chart

BYND Operating Margin (TTM) data by YCharts.

These factors put the company in a more defensive position since the industry is shrinking, and product launches aren't slowing the sales slump. In that environment, Beyond Meat needs to shift to a cost-cutting and cash-preservation posture in hopes of maintaining a strong brand position for the day when industry trends finally stabilize.

Don't buy right now

Management already announced a 19% cut in its global workforce. In this report, it outlined even more aggressive steps to rightsize the business. "Beyond Meat is executing a full force pivot to a sustainable growth model, emphasizing the achievement of cash flow positive operations," CEO Ethan Brown said in a press release.

That cash flow might arrive as early as late 2023, executives project. For context, the company has burned through $270 million of operating cash in the last nine months.

The Q3 earnings report confirmed that management was right to take aggressive action in slashing its cost base. The brand is also likely to be a big player in the plant-based meat niche, once it survives the current slump.

But investors have no visibility into that stabilization right now, and losses will likely continue well into 2023. And it isn't clear whether consumer preferences will shift back to food products like plant-based burgers, sausages, and chicken products.

That's why the stock doesn't look appetizing, even after its price has dropped by over 80% in 2022. There are better growth stocks for investors to own, with clear market-share strength and solid profitability. Beyond Meat is missing these critical ingredients right now.