Beyond Meat® Reports Third Quarter 2024 Financial Results
EL SEGUNDO, Calif., Nov. 06, 2024 (GLOBE NEWSWIRE) -- Beyond Meat, Inc. (NASDAQ:BYND) ("Beyond Meat" or "the Company"), a leader in plant-based meat, today reported financial results for its third quarter ended September 28, 2024.
Third Quarter 2024 Financial Highlights1
Net revenues were $81.0 million, an increase of 7.6% year-over-year.
Gross profit was $14.3 million, or gross margin of 17.7%, compared to a loss of $7.3 million, or gross margin of -9.6%, in the year-ago period.
Loss from operations was $30.9 million, or operating margin of -38.1%, compared to loss from operations of $69.6 million, or operating margin of -92.4%, in the year-ago period.
Net loss was $26.6 million, or $0.41 per common share, compared to net loss of $70.5 million, or $1.09 per common share, in the year-ago period.
Adjusted EBITDA was a loss of $19.8 million, or -24.4% of net revenues, compared to an Adjusted EBITDA loss of $57.5 million, or -76.3% of net revenues, in the year-ago period.
Beyond Meat President and CEO Ethan Brown commented, "We are pleased to report that in the third quarter we returned to growth, increasing net revenues on a year-over-year basis, while continuing to expand gross margin and reduce operating expenses on both a sequential and year-over-year basis. Looking ahead, we expect to increase our cash reserves by year-end and pursue further balance sheet restructuring in 2025."
______________
1 This release includes references to non-GAAP financial measures. Refer to "Non-GAAP Financial Measures" later in this release for the definitions of the non-GAAP financial measures presented and a reconciliation of these measures to their closest comparable GAAP measures.
Third Quarter 2024
Net revenues increased 7.6% to $81.0 million in the third quarter of 2024, compared to $75.3 million in the year-ago period. The increase in net revenues was primarily driven by a 15.8% increase in net revenue per pound, partially offset by a 7.1% decrease in volume of products sold. The increase in net revenue per pound was primarily driven by lower trade discounts, price increases of certain of our products and changes in product sales mix, partially offset by unfavorable changes in foreign currency exchange rates.
U.S. retail channel net revenues increased 14.6% to $35.0 million in the third quarter of 2024, compared to $30.5 million in the year-ago period, primarily due to a 22.6% increase in net revenue per pound, partially offset by a 6.6% decrease in volume of products sold, primarily reflecting weak category demand and price elasticity effects. The increase in net revenue per pound was primarily driven by lower trade discounts and price increases of certain of our products, partially offset by changes in product sales mix.
U.S. foodservice channel net revenues increased 15.5% to $14.5 million in the third quarter of 2024, compared to $12.5 million in the year-ago period, primarily due to a 7.9% increase in volume of products sold, primarily reflecting sales of chicken products to a U.S. QSR customer that did not occur in the year-ago period, and a 7.0% increase in net revenue per pound, primarily driven by price increases of certain of our products and changes in product sales mix, partially offset by higher trade discounts.
International retail channel net revenues increased 17.0% to $16.6 million in the third quarter of 2024, compared to $14.2 million in the year-ago period, primarily due to a 10.5% increase in net revenue per pound and a 6.0% increase in volume of products sold, primarily reflecting distribution gains and increased demand in certain geographic regions. The increase in net revenue per pound primarily reflected lower trade discounts and changes in product sales mix, partially offset by price decreases of certain of our products and unfavorable changes in foreign currency exchange rates.
International foodservice channel net revenues decreased 17.2% to $15.0 million in the third quarter of 2024, compared to $18.1 million in the year-ago period, primarily due to a 22.1% decrease in volume of products sold, mainly reflecting decreased sales of burger and chicken products to a large QSR customer in the EU, partially offset by a 6.2% increase in net revenue per pound. The increase in net revenue per pound primarily reflected lower trade discounts and price increases of certain of our products, partially offset by changes in product sales mix and unfavorable changes in foreign currency exchange rates.
Net revenues by channel (unaudited):
The following tables present the Company's net revenues by channel for the periods presented:
Three Months Ended
Change
(in thousands)
September 28,2024
September 30,2023
Amount
%
U.S.:
Retail
$
34,969
$
30,518
$
4,451
14.6
%
Foodservice
14,478
12,535
1,943
15.5
%
U.S. net revenues
49,447
43,053
6,394
14.9
%
International:
Retail
16,565
14,153
2,412
17.0
%
Foodservice
14,994
18,106
(3,112
)
(17.2
)%
International net revenues
31,559
32,259
(700
)
(2.2
)%
Net revenues
$
81,006
$
75,312
$
5,694
7.6
%
Nine Months Ended
Change
(in thousands)
September 28,2024
September 30,2023
Amount
%
U.S.:
Retail
$
116,926
$
123,167
$
(6,241
)
(5.1
)%
Foodservice
37,132
39,974
(2,842
)
(7.1
)%
U.S. net revenues
154,058
163,141
(9,083
)
(5.6
)%
International:
Retail
46,728
48,437
(1,709
)
(3.5
)%
Foodservice
49,008
58,119
(9,111
)
(15.7
)%
International net revenues
95,736
106,556
(10,820
)
(10.2
)%
Net revenues
$
249,794
$
269,697
$
(19,903
)
(7.4
)%
Volume of products sold by channel (unaudited):
The following table presents consolidated volume of the Company's products sold in pounds for the periods presented:
Three Months Ended
Change
Nine Months Ended
Change
(in thousands)
September 28,2024
September 30,2023
Amount
%
September 28,2024
September 30,2023
Amount
%
U.S.:
Retail
6,727
7,199
(472
)
(6.6
)%
22,296
26,064
(3,768
)
(14.5
)%
Foodservice
2,271
2,104
167
7.9
%
6,061
6,866
(805
)
(11.7
)%
International:
Retail
3,576
3,375
201
6.0
%
10,416
10,868
(452
)
(4.2
)%
Foodservice
4,144
5,317
(1,173
)
(22.1
)%
14,219
16,864
(2,645
)
(15.7
)%
Volume of products sold
16,718
17,995
(1,277
)
(7.1
)%
52,992
60,662
(7,670
)
(12.6
)%
Gross profit in the third quarter of 2024 was $14.3 million, or gross margin of 17.7%, compared to a loss of $7.3 million, or gross margin of -9.6%, in the year-ago period. Gross profit and gross margin in the third quarter of 2024 were positively impacted by increased net revenue per pound and decreased cost of goods sold per pound, partially offset by decreased volume of products sold. The decrease in cost of goods sold per pound primarily reflected lower inventory provision, lower logistics costs and reduced materials costs.
Operating expenses were $45.2 million in the third quarter of 2024, compared to $62.4 million in the year-ago period. The decrease in operating expenses was primarily due to reduced general and administrative expenses, including a $2.0 million insurance recovery benefit, lower non-production salaries and related expenses, and reduced selling expenses.
Loss from operations was $30.9 million in the third quarter of 2024, compared to $69.6 million in the year-ago period. The decrease in loss from operations was driven by increased gross profit and reduced operating expenses.
Total other income, net, was $4.4 million in the third quarter of 2024, compared to total other expense, net, of $0.7 million in the year-ago period. The increase in total other income, net, was primarily due to increased net realized and unrealized foreign currency transaction gains.
Net loss was $26.6 million in the third quarter of 2024, compared to $70.5 million in the year-ago period. Net loss per common share was $0.41 in the third quarter of 2024, compared to $1.09 in the year-ago period. The decrease in net loss was primarily driven by the reduction in loss from operations and an increase in total other income, net.
Adjusted EBITDA was a loss of $19.8 million, or -24.4% of net revenues, in the third quarter of 2024, compared to an Adjusted EBITDA loss of $57.5 million, or -76.3% of net revenues, in the year-ago period.
Balance Sheet and Cash Flow Highlights
The Company's cash and cash equivalents balance, including restricted cash, was $134.9 million and total outstanding debt was $1.1 billion as of September 28, 2024. Net cash used in operating activities was $69.9 million in the nine months ended September 28, 2024, compared to $79.3 million in the year-ago period. Capital expenditures totaled $4.5 million in the nine months ended September 28, 2024, compared to $8.6 million in the year-ago period. Net cash used in investing activities was $10,000 in the nine months ended September 28, 2024, compared to $9.3 million in the year-ago period. Net cash used in investing activities in the nine months ended September 28, 2024 included $4.1 million in proceeds from sales of fixed assets, compared to $2.5 million in the year-ago period.
2024 Outlook
Based on management's best assessment of the environment today, the Company is updating its outlook for the full year 2024:
Net revenues are expected to be in the range of $320 million to $330 million.
Gross margin is expected to be in the mid-teens range.
Operating expenses, excluding the $7.5 million expense related to the consumer class action settlement accrued in the first quarter of 2024, are expected to be in the range of $180 million to $190 million.
Capital expenditures are expected to be in the range of $10 million to $15 million.
Total distribution outlets by channel (unaudited):
The following table presents the approximate number of distribution outlets by channel for the periods presented:
Q2 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024
Q3 2024
U.S.:
Retail(1)
33,000
33,000
32,000
29,000
29,000
28,000
Foodservice
41,000
42,000
41,000
40,000
39,000
38,000
International:
Retail
36,000
36,000
36,000
36,000
37,000
38,000
Foodservice
34,000
26,000
24,000
25,000
25,000
25,000
Total distribution outlets(1)(2)
144,000
137,000
133,000
130,000
130,000
129,000
__________
(1) Excludes U.S. retail outlets unique to Beyond Meat Jerky, which has been discontinued.(2) The number of retail and foodservice outlets where Beyond Meat branded products are available was derived from rolling 52-week data as of September 2024.
Conference Call and Webcast
The Company will host a conference call to discuss these results at 5:00 p.m. Eastern, 2:00 p.m. Pacific. Investors interested in participating in the live call can dial 412-902-4255. There will also be a simultaneous, live webcast available on the Investors section of the Company's website at www.beyondmeat.com. The webcast will also be archived.
About Beyond Meat
Beyond Meat, Inc. (NASDAQ:BYND) is a leading plant-based meat company offering a portfolio of revolutionary plant-based meats made from simple ingredients without GMOs, no added hormones or antibiotics, and 0mg of cholesterol per serving. Founded in 2009, Beyond Meat products are designed to have the same taste and texture as animal-based meat while being better for people and the planet. Beyond Meat's brand promise, Eat What You Love®, represents a strong belief that there is a better way to feed our future and that the positive choices we all make, no matter how small, can have a great impact on our personal health and the health of our planet. By shifting from animal-based meat to plant-based protein, we can positively impact four growing global issues: human health, climate change, constraints on natural resources and animal welfare. Visit www.BeyondMeat.com and follow @BeyondMeat on Facebook, Instagram, Threads and LinkedIn.
Forward-Looking Statements
Certain statements in this release constitute "forward-looking statements" within the meaning of the federal securities laws, including statements related to the Company's expectations with respect to its full year 2024 outlook.
Forward-looking statements are based on management's current opinions, expectations, beliefs, plans, objectives, assumptions and projections regarding financial performance, prospects, future events and future results, including ongoing uncertainty related to macroeconomic issues, including high inflation and interest rates, prolonged, weakening demand in the plant-based meat category, ongoing concerns about the likelihood of a recession and increased competition, among other matters, and involve known and unknown risks that are difficult to predict. In some cases, you can identify forward-looking statements by the use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "project," "predict," "outlook," "potential," "continue," "likely," "will," "would" and variations of these terms and similar expressions, or the negative of these terms or similar expressions. These forward-looking statements are only predictions, not historical fact, and involve certain risks and uncertainties, as well as assumptions. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by which or whether, such performance or results will be achieved. Actual results, levels of activity, performance, achievements and events could differ materially from those stated, anticipated or implied by such forward-looking statements. While Beyond Meat believes that its assumptions are reasonable, it is very difficult to predict the impact of known factors and, of course, it is impossible to anticipate all factors that could affect actual results. There are many risks and uncertainties that could cause actual results to differ materially from forward-looking statements made herein including, but not limited to, the sufficiency of our cash and cash equivalents to meet our liquidity needs, including estimates of our expenses, future revenues, capital expenditures, capital requirements and our ability to obtain additional equity or debt financing, including the terms of such financing (if at all), and to bolster and restructure our balance sheet; the availability of our "at-the-market" offering program; risks related to our significant debt, including our ability to repay our indebtedness, limitations on our cash flow from operations and our ability to satisfy our obligations under the convertible senior notes; our ability to refinance the convertible senior notes; our ability to raise the funds necessary to repurchase the convertible senior notes for cash, under certain circumstances, or to pay any cash amounts due upon conversion; the significant dilution to existing stockholders that will result if we exchange any portion of our outstanding convertible notes for equity; provisions in the indenture governing the convertible senior notes delaying or preventing an otherwise beneficial takeover of us; and any adverse impact on our reported financial condition and results from the accounting methods for the convertible senior notes; a continued decrease in demand, and the underlying factors negatively impacting demand, in the plant-based meat category; risks and uncertainties related to certain cost-reduction initiatives, cost structure improvements, workforce reductions and executive leadership changes, and the timing and success of reducing operating expenses and achieving certain financial goals and cash flow positive objectives; the timing and success of narrowing our commercial focus to certain anticipated growth opportunities; accelerating activities that prioritize gross margin expansion and cash generation, including as part of our review of our global operations initiated in November 2023 ("Global Operations Review"); changes to our pricing architecture within certain channels including price increases of certain of our products in our U.S. retail and foodservice channels; and accelerated, cash-accretive inventory reduction initiatives; our ability to successfully execute our Global Operations Review, including the exit or discontinuation of select product lines such as Beyond Meat Jerky; the impact of non-cash charges such as provision for excess and obsolete inventory and potential impairment charges, accelerated depreciation on write-offs and disposals of fixed assets, and losses on sale and write-down of fixed assets; further optimization of our manufacturing capacity and real estate footprint; reductions in our workforce; and the continued review of our operations in China, which may include scaling back or discontinuing some or all of our operations in China; matters relating to our El Segundo Campus and Innovation Center ("Campus Headquarters") including, without limitation, the ability to meet our obligations under our Campus Headquarters lease ("Campus Lease"), the timing of occupancy and completion of the build-out of our remaining space, any cost overruns or delays, the unavailability of the tenant improvement allowance to pay for the build-out of our remaining space, the impact of workforce reductions or other cost-reduction initiatives on our space demands, and the timing and success of subleasing, assigning or otherwise transferring excess space or negotiating a partial lease termination at our Campus Headquarters on terms advantageous to us or at all, including any potential impairment charges that may result; our ability to meet our obligations under leases for our corporate offices, manufacturing facilities and warehouses, or risks related to excess space capacity under our leases due to workforce reductions or other cost-reduction initiatives; reduced consumer confidence and changes in consumer spending, including spending to purchase our products, and negative trends in consumer purchasing patterns due to levels of consumers' disposable income, credit availability and debt levels, and economic conditions, including due to recessionary and inflationary pressures; our inability to properly manage and ultimately sell our inventory in a timely manner, which has in the past and could in the future require us to sell our products through liquidation channels at lower prices, write-down or write-off obsolete inventory, or increase inventory provision; any future impairment charges, including due to any future changes in estimates, judgments or assumptions, failure to achieve forecasted operating results, weakness in the economic environment, changes in market conditions, declines in our market capitalization, failure to sublease, assign or otherwise transfer excess space or negotiate a partial lease termination at our Campus Headquarters on terms advantageous to us or at all, and our continued review of our operations in China, which may include scaling back or discontinuing some or all of our operations in China; our ability to accurately predict consumer taste preferences, trends and demand and successfully innovate, introduce and commercialize new products and improve existing products such as our Beyond IV platform and our Beyond Sun Sausage line, including in new geographic markets; the effects of competitive activity from our market competitors and new market entrants; our ability to protect our brand against misinformation about our products and the plant-based meat category, real or perceived quality or health issues with our products, marketing campaigns aimed at generating negative publicity regarding our products and the plant-based meat category, including regarding the nutritional value of our products, and other issues that could adversely affect our brand and reputation; the impact of inflation and higher interest rates across the economy and on consumer behavior, including higher food, grocery, raw materials, transportation, energy, labor and fuel costs; the impact of adverse and uncertain economic and political conditions in the U.S. and international markets, including concerns about the likelihood of an economic recession, downturn or periods of high inflation, and the 2024 U.S. presidential election; disruption to, and the impact of uncertainty in, our domestic and international supply chain, including labor shortages and disruption, shipping delays and disruption, and the impact of cyber incidents at suppliers and vendors; our ability to streamline operations and improve cost efficiencies, which could result in the contraction of our business and the implementation of significant cost cutting measures such as further downsizing and exiting certain operations, including product lines, domestically and/or abroad; the impact of uncertainty as a result of doing business in China and Europe, including our continued review of our operations in China, which may include scaling back or discontinuing some or all of our operations in China; the volatility of or inability to access the capital markets, including due to macroeconomic factors, geopolitical tensions or the outbreak of hostilities or war - for example, the war in Ukraine and the conflict in Israel, Gaza and surrounding areas; changes in the retail landscape, including our ability to maintain and expand our distribution footprint, the timing, success and level of trade and promotion discounts, our ability to maintain and grow market share and increase household penetration, repeat purchases, buying rates (amount spent per buyer) and purchase frequency, our ability to maintain and increase sales velocity of our products, and the timing and success of the Beyond IV and Beyond Sun Sausage product launches; changes in the foodservice landscape, including the timing, success and level of marketing and other financial incentives to assist in the promotion of our products, our ability to maintain and grow market share and attract and retain new foodservice customers or retain existing foodservice customers, and our ability to introduce and sustain offering of our products on menus; the timing and success of distribution expansion and new product introductions, including the timing and success of the Beyond IV and Beyond Sun Sausage product launches, in increasing revenues and market share; our ability to differentiate and continuously create innovative products, respond to competitive innovation and achieve speed-to-market, including the timing and success of the Beyond IV and Beyond Sun Sausage product launches; the timing and success of strategic Quick Service Restaurant partnership launches and limited time offerings resulting in permanent menu items; the outcomes of legal or administrative proceedings, or new legal or administrative proceedings filed against us; foreign currency exchange rate fluctuations; our ability to identify and execute cost-down initiatives intended to improve our profitability; the effectiveness of our business systems and processes; our estimates of the size of our market opportunities and ability to accurately forecast market growth; our ability to effectively optimize our manufacturing and production capacity, and real estate footprint, including consolidating manufacturing facilities and production lines, exiting co-manufacturing arrangements and effectively managing capacity for specific products with shifts in demand; risks associated with underutilization of capacity which have in the past and could in the future give rise to increased costs per unit, underutilization fees, termination fees and other costs to exit certain supply chain arrangements and product lines and/or the write-down or write-off of certain equipment and other fixed assets; our ability to accurately forecast our future results of operations and financial goals or targets, including as a result of fluctuations in demand for our products and in the plant-based meat category generally and increased competition; our ability to accurately forecast demand for our products and manage our inventory, including the impact of customer orders ahead of holidays and shelf reset activities, customer and distributor changes and buying patterns, such as reductions in targeted inventory levels, and supply chain and labor disruptions, including due to the impact of cyber incidents at suppliers and vendors; our operational effectiveness and ability to fulfill orders in full and on time; variations in product selling prices and costs, the timing and success of changes to our pricing architecture within certain channels including the price increases of certain of our products in our U.S. retail and foodservice channels, and the mix of products sold; our ability to successfully enter new geographic markets, manage our international business and comply with any applicable laws and regulations, including risks associated with doing business in foreign countries, substantial investments in our manufacturing operations in China and the Netherlands, and our ability to comply with the U.S. Foreign Corrupt Practices Act or other anti-corruption laws; the effects of global outbreaks of pandemics (such as the COVID-19 pandemic), epidemics or other public health crises, or fear of such crises; the success of our marketing initiatives and the ability to maintain and grow our brand awareness, maintain, protect and enhance our brand, attract and retain new customers and maintain and grow our market share, particularly while we are seeking to reduce our operating expenses; our ability to attract, maintain and effectively expand our relationships with key strategic foodservice partners; our ability to attract and retain our suppliers, distributors, co-manufacturers and customers; our ability to procure sufficient high-quality raw materials at competitive prices to manufacture our products; the availability of pea and other proteins and avocado oil that meet our standards; our ability to diversify the protein sources used for our products; our ability to successfully execute our strategic initiatives; the volatility associated with ingredient, packaging, transportation and other input costs; our ability to keep pace with technological changes impacting the development of our products and implementation of our business needs; significant disruption in, or breach in security of our or our suppliers' or vendors' information technology systems, including any inability to detect or timely report any cybersecurity incidents, and resultant interruptions in service and any related impact on our reputation, including data privacy, and any potential impact on our supply chain, including on customer demand, order fulfillment and lost sales, and the resulting timing and/or amount of net revenues recognized; the ability of our transportation providers to ship and deliver our products in a timely and cost effective manner; senior management and key personnel changes, the attraction, training and retention of qualified employees and key personnel and our ability to maintain our company culture; the effects of organizational changes including reductions-in-force and realignment of reporting structures; the success of operations conducted by joint ventures where we share ownership and management of a company with one or more parties who may not have the same goals, strategies or priorities as we do and where we do not receive all of the financial benefit; the impact of the discontinuation of the Beyond Meat Jerky product line; risks related to use of a professional employer organization to administer human resources, payroll and employee benefits functions for certain of our international employees, and use of certain third party service providers for the performance of several business operations including payroll and human capital management services; the impact of potential workplace hazards; the effects of natural or man-made catastrophic or severe weather events, including events brought on by climate change, particularly involving our or any of our co-manufacturers' manufacturing facilities, our suppliers' facilities or any other vital aspects of our supply chain; the effectiveness of our internal controls; accounting estimates based on judgment and assumptions that may differ from actual results; changes in laws and government regulation affecting our business, including the U.S. Food and Drug Administration and the U.S. Federal Trade Commission governmental regulation, and state, local and foreign regulation; new or pending legislation, or changes in laws, regulations or policies of governmental agencies or regulators, both in the U.S. and abroad, affecting plant-based meat, the labeling or naming of our products, or our brand name or logo; the failure of acquisitions and other investments to be efficiently integrated and produce the results we anticipate; risks inherent in investment in real estate; adverse developments affecting the financial services industry; the financial condition of, and our relationships with our suppliers, co-manufacturers, distributors, retailers, and foodservice customers, and their future decisions regarding their relationships with us; our ability and the ability of our suppliers and co-manufacturers to comply with food safety, environmental or other laws or regulations and the impact of any non-compliance on our operations, brand reputation and ability to fulfill orders in full and on time; seasonality, including increased levels of grilling activity and higher levels of purchasing by customers ahead of holidays, customer shelf reset activity and the ...
