Beyond Meat Inc (BYND.O) on Thursday lowered its revenue forecast for the year and announced job cuts as rising inflation hurt the company’s efforts to make its pricier plant-based meat more affordable for consumers.
Higher prices of plant-based meat have slowed the growth of the category with people trading down to lower-priced chicken and beef, Beyond Meat Chief Executive Ethan Brown said on an earnings call.
The second quarter saw a sequential contraction in US household penetration of plant-based meat for the first time in more than four years, Brown said, citing data from Numerator.
Beyond Meat now expects 2022 revenue of $470 million to $520 million, compared with its prior range of $560 million to $620 million. Analysts were expecting revenue of $559.4 million, according to Refinitiv data.
“(The guidance cut) calls into question how long Beyond Meat’s liquidity will last to fund their future growth. The pressures on the model are only intensifying,” Oppenheimer analyst Rupesh Parikh said.
The company’s cash and cash equivalents balance was $454.7 million at the end of the second quarter. Net cash used in operating activities was $235.7 million for the first half of the year.
Beyond Meat also said it would aim to reduce operating expenses, after its loss of $1.53 per share for the second quarter was much wider than analysts’ expectations of $1.18.
To record nearly $8 million in annualized savings, Beyond Meat said it would cut roughly 4 per cent of its global workforce. It had 1,108 full-time employees and 311 full-time contract workers, as of 2021 end.
Net revenue also declined 1.6 per cent to $147 million for the second quarter, missing estimates of $149.2 million, as it had to lower prices in parts of Europe to clear excess stock.