‘We really do believe we are at the early stages of a pivotal and terrific year for Beyond Meat’ – Ethan Brown, President and chief executive of Beyond Meat
Beyond Meat has called on investors to stay optimistic despite a challenging first quarter pinning hopes on its new US burger to kickstart flagging sales.
The plant-based meat company’s President and chief executive Ethan Brown told investors during a conference call: “We really do believe we are at the early stages of a pivotal and terrific year for Beyond Meat. We’re doing the things you need to do to get through a period that’s challenging and return to growth.”
The firm faced a tough first quarter with a slump in demand for its range of burgers, steak, and chicken across the US and international markets. Based in El Segundo, California, Beyond Meat reported an 18% drop in revenue to $75.6million for the January-March period, which was just above Wall Street’s expectations of $75.2million.
This marks the eighth consecutive quarter where the company has seen year-over-year revenue declines. Despite offering discounts, Beyond Meat noted a softness in US retail demand and also attributed the sales dip to the discontinuation of its Beyond Meat Jerky. Sales in both US retail and food service sectors dropped by 16%.
Beyond Meat has reported a significant 12% slump in international retail sales, reflecting a decline in demand for plant-based chicken alternatives. International food service sales also experienced a sharp 29% drop, which the company attributed to a challenging comparison with the first quarter of 2023, when an increase in orders from McDonald’s, linked to the launch of its plant-based McNuggets in Europe, boosted sales.
Mr Brown cited concerns over inflation as a factor contributing to the subdued demand for their products in certain markets, including the United Kingdom and Canada. However, he affirmed their optimism regarding the European market, highlighting McDonald’s recent expansion of McPlant burger sales a product jointly developed with Beyond Meat to Latvia, Lithuania, and Estonia.
Introducing the fourth iteration of the Beyond Burger, now available in US stores, Brown addressed concerns surrounding the health aspects of their products. This new version boasts a 60% reduction in saturated fat and increased protein content compared to its predecessor.
Beyond Meat is gearing up for a marketing campaign to promote the new burger. “We wanted to tackle that directly and try to make our products as unassailable on the health side as they are on the climate and environment and animal welfare side of things,” Mr Brown stated.
The new burger will come with a higher price tag than its predecessor, reflecting its premium positioning, he added. Beyond Meat has reiterated its outlook, expressing confidence in its projected net revenue of $315million to $345million for the full year.
The company reported a full-year revenue of $343million in 2023. However, investors seemed doubtful as Beyond Meat’s shares plummeted by 15% in after-hours trading earlier in the week. The company’s first quarter net loss decreased to $54.4million from $59million in the same quarter the previous year.
After adjusting for one-time items, the company recorded a loss of 72 cents per share, which was higher than the 67-cent loss analysts had predicted, according to FactSet.
