What happened
Shares of Beyond Meat (BYND 0.95%) popped on Friday after the provider of plant-based meat substitutes reported narrower fourth-quarter losses than analysts expected. At the close of trading, Beyond Meat's stock price was up more than 10% after having been up by as much as 33% earlier in the session.
So what
Beyond Meat posted a loss of $67 million, or $1.05 per share, in the fourth quarter. That's a significant improvement from the loss of $80 million, or $1.27 per share, that the company generated in the prior-year period. It also topped Wall Street's estimates, which had called for a loss of $1.18 per share.
"Our fourth quarter results clearly demonstrate delivery against our strategy and plan, including solid sequential progress on margin recovery and operating expense reduction, and continued inventory drawdown," CEO Ethan Brown said in a press release.
Still, Beyond Meat's revenue fell 20.6% year over year to $79.9 million. Demand for meat alternatives has waned as inflation has driven more consumers to seek out lower-cost fare. At the same time, the prices of chicken and other animal meats have declined since peaking earlier in the pandemic.
Beyond Meat is also facing intensifying competition from larger and more diversified food producers. Due to its market share losses, Beyond Meat now has a smaller piece of a shrinking niche.
Now what
To revitalize its sales, the company is launching new products such as Beyond Steak and McPlant Nuggets. It is also working to bolster its profit margins and cash flow production by cutting costs and reducing its inventory levels.
"We are making solid progress in our transition to a sustainable growth model, one that emphasizes the achievement of cash flow positive operations within the second half of 2023," Brown said.
