EL SEGUNDO, CALIF. — Fewer people are buying Beyond Meat Inc.’s plant-based meat products. During the second quarter, ended July 1, total volume sold fell 24% to 22.9 million lbs, down from 30.1 million lbs during the same period the year before.
In the US Retail channel, the company’s largest, the volume of product sold plummeted 34% to 10.5 million lbs, down from 16.1 million lbs the year before. Only in the International Foodservice channel did the company see a 19% uptick in volumes, rising from 5 million lbs during the second quarter of fiscal 2022 to 6 million lbs this year.
“In US Retail, the decline in volume primarily reflected weaker-than-expected demand in the category, cycling of significant jerky sell-in in the year ago period and, to a lesser extent, the impact from competition,” said Lubi Kutua, chief financial officer and treasurer. “US Foodservice was similarly impacted by weak overall demand and a difficult year-over-year comparison as Q2 2022 was a particularly strong quarter for US Foodservice driven by restocking of that channel following its reopening post COVID.”
The weak volume of products sold contributed to another poor quarter for the company. Beyond Meat recorded a loss of $53.5 million during the quarter, an improvement when compared with the second quarter of fiscal 2022 when the company recorded a loss of $97.1 million.
Quarterly sales fell to $102.2 million from $147 million the year before.
“This decline in net revenues reflected deeper headwinds than we previously anticipated, combined with the cycling of one of our largest quarters ever, among other factors,” said Ethan Brown, president and chief executive officer, during an Aug. 7 conference call to discuss the results.
Later in the call, Mr. Brown added, “… we view the current category trough and how this perspective informs the strategy and tenor behind our response. Like many innovative disruptions throughout history, what we initially thought was going to be a quicker pace of mainstream adoption has proven to be slower.”
While the company anticipates “modest year-on-year revenue growth” during the second half of fiscal 2023, management lowered the company’s sales outlook for the year.
“…We now expect net revenues for the full year to be in the range of $360 million to $380 million representing a decrease of approximately 14% to 9% compared to 2022,” Mr. Kutua said.
A goal set by the company in fiscal 2022 was to achieve cash flow positive operations during the second half of fiscal 2023.
“With respect to the company’s previously stated target of achieving cash flow positive operations within the second half of 2023, we now believe this objective is unlikely to be met in light of the current operating environment, which points to greater category headwinds than previously expected,” Mr. Kutua said. “Nonetheless, we remain committed to significantly reducing our rate of cash consumption in the second half of the year as compared to the first half, and we will be prudently managing our cost base in the coming quarters to move towards our ultimate North Star of cash flow positive operations.”
For the first six months of fiscal 2023, Beyond Meat endured a loss of $112.5 million, which compared favorably to the first six months of fiscal 2022 when the company recorded a loss of $197.6 million.
Sales for the period fell significantly, from $256.5 million in fiscal 2022 to $194.4 million this year.