Beyond Meat tops revenue estimates, plans ‘steep’ cost cuts in 2024; shares soar

BEYOND Meat on Tuesday topped market expectations for fourth-quarter revenue on resilient demand for its faux meat patties in key markets outside the United States, and said it would ramp up its pricing actions in 2024.

The company’s shares, which fell 27.7 per cent in 2023, jumped about 84 per cent in extended trade on Tuesday as CEO Ethan Brown also said Beyond Meat would “steeply reduce” operating expense and cash use in the year.

About 40 per cent of the company’s shares were short at the end of January, as per LSEG data.

To counter weak demand in the United States, Beyond Meat, which supplies its plant-based meat patties to fast food chains such as McDonald’s and Yum! Brands, has lowered prices and resorted to higher discounts.

Faux meat is pricier than traditional meat — a factor that has discouraged budget-conscious consumers in the US from opting for the former in recent times.

The company has also been able to sustain demand for plant-based meat in its international markets, particularly Europe.

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Cost-cut measures, including job cuts taken last year, have also helped reduce the burden on margins from sluggish demand in the United States.

Volumes rose 8 per cent in the quarter ended Dec 31, compared to a 3.5 per cent increase in the third quarter.

Net revenue for the fourth quarter fell 7.8 per cent to US$73.7 million, but topped analysts’ average estimate of US$66.7 million, as per LSEG data.

Still, the company’s full-year net revenue forecast in the range of US$315 million to US$345 million was largely below market expectations of $343.8 million.

It reported a bigger-than-expected loss of 92 cents per share for the fourth quarter, compared with expectations of 88 cents. REUTERS