Beyond Meat Inc. surged in late trading after reporting fourth-quarter sales that exceeded expectations and the plant-based meat maker showed progress toward its goal of becoming profitable.
Fourth-quarter revenue of US$79.9 million was above the average estimate of US$75.7 million compiled by Bloomberg. It surpassed expectations in U.S. sales to retailers and restaurants, as well as in international channels.
The shares rose 14 per cent in after hours trading at 5:25 p.m. New York time. The stock has risen 39 per cent in 2023 through Thursday’s close.
“We are making solid progress in our transition to a sustainable growth model,” Chief Executive Officer Ethan Brown said in the statement. The company posted a loss, excluding items such as taxes and interest, of US$56.5 million. That’s better than Wall Street expected.
Revenue was still down 21 per cent from a year earlier, however. The maker of the Beyond Burger has been struggling to convince consumers to stick with it as prices remain higher than animal meat and and budgets get tighter. Consumer interest in plant-based meat also appears to be waning, according to market data.
“Although revenues have yet to bottom, Beyond Meat is slowly but steadily making strides towards restoring margins and achieving its goal of positive operating cash flow by the second half of 2023,” Arun Sundaram, an equity analyst at CFRA, said in an email. He warned, however, that “the company continues to burn cash at a high rate.”
Beyond Meat said it now had US$309.9 million in cash reserves at the end of the fourth quarter, down from the US$390.2 million it reported the previous quarter. The company is reducing expenses by marketing less and by cutting operations costs. It has also laid off workers.
Challenges for the alt-meat maker remain stark: While revenue was higher than Wall Street expected, it was down from a year earlier in both supermarkets and restaurants, even as the company reduced prices and expanded its distribution. It added about 5,000 new U.S. food-service locations compared to a year earlier, but sales still declined.
The company sees net revenue in a range of US$375 million to US$415 million for the full year, compared with analysts’ estimate of US$394 million.
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