Bloomberg-Beyond Meat slashes Full Year Revenue Outlook

The revenue outlook for the full year was slashed by Bloomberg- Beyond Meat Inc., who said shoppers are trading down from its plant-based options to cheaper animal proteins.

The shares, which have lost 50% of their value this year, fell 1.1% at 5: 32 p.m. in late New York trading.

The company that makes plant-based burgers is in a race to increase output and bring new products to the market, which has raised concerns about whether its pace of spending is sustainable. The company faces volatile demand for its relatively high-priced products as inflation erodes purchasing power. The company said that gross profit was negative because of the liquidation of slow-selling products.

Shoggi M. Ezeizat, a consumer stocks analyst at Third Bridge said today s inflationary pressure is a significant concern for the plant-based meat industry. Flexitarians could switch back to lower-cost animal protein as they try to reduce discretionary spending. In a call with analysts, Chief Executive Officer Ethan Brown acknowledged that consumer buying patters have shifted away from plant-based meat. His company now sees sales in a range of $470 million to $520 million for the full year. That is down from the previous range of $560 million to $620 million. Wall Street did not estimate second-quarter sales of $147 million.

Beyond Meat had $455 million in cash and cash equivalents on hand at the end of the quarter, compared to the $548 million it had at the end of the first quarter.

Cash used in operations during the period was $70.5 million - a decrease from the $162.5 million it burned in the first quarter. The company had $1.1 billion in outstanding debt at the end of the quarter.

The company said it is reducing its workforce by about 4%, according to a report by Bloomberg News. The move is expected to generate an annual savings of around $8 million, but it also says that severance costs will total $1 million.

International foodservice sales saw an increase of 7%, with a 7% rise due to higher volume. Consumers in overseas are more amenable to substituting meat for alternative products than Americans have been.

The US foodservices net revenues fell 2.4% due to a discontinuation with a certain customer that the company does not name. In June of last year, Dunkin said the Beyond Sausage Breakfast Sandwich would be available at several hundred locations, a reduction from its 2019 rollout at more than 9,000 across the U.S. The US foodservice decline was partially offset by an increase in sales of other products.

Beyond Meat's fast-food partnerships haven't paid off in any meaningful sales. Although it has deals with both McDonald's Corp. and Yum! Brands Inc. hasn't yet landed a permanent menu item at any of the chains US restaurants.

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