Beyond Meat has published its financial results for Q2 2024, showing that the company exceeded revenue guidance and achieved its best quarterly margin since Q2 2021.
Net revenues reached $93.2 million, above the guidance range of $85 to $90 million; this was partly due to price increases on certain products. However, the figures still reflect an 8.8% decline compared to the same period last year. This was driven by a 14% decrease in the volume of products sold, which was partially offset by a 6.1% increase in net revenue per pound.
President and CEO Ethan Brown said a “sustained misinformation campaign” by the animal protein and pharmaceutical industries had negatively impacted consumer perception of plant-based meat alternatives. However, he explained that the company was countering this with an emphasis on health and wellness, noting that the clean ingredients and improved nutritional profile of the new Beyond IV portfolio had been met with “consumer, media, and nutritionist enthusiasm”.
Brown pointed out that some of the company’s products have been certified by the American Heart Association, including the new Beyond Sun Sausage which claims to offer an entirely new protein option rather than replicating beef, pork, or poultry. He said that it would eventually be “arguable whether Beyond Meat is at its core, a plant-based meat company that delivers health and wellness or a health and wellness company that makes plant-based meat”.
Gross margins reached 14.7%, up significantly from 2.2% a year ago, while loss from operations was $33.9 million, down from $53.8 million. Operating expenses saw a $2 million reduction compared to Q1, after adjusting for a $7.5 million class action settlement. Adjusted EBITDA was a loss of $23.0 million, compared to a loss of $40.8 million in the year-ago period.
It has also been reported that Beyond Meat is in talks with bondholders to restructure the company’s debt. The bondholders reportedly hold $1.1 billion of Beyond Meat’s convertible notes. The company’s reduced liquidity has been attributed to cash burn over the past several quarters, as inflation led to weaker sales.
“Strong quarter of progress”
The past few years have been challenging for Beyond Meat; the company’s Q1 2024 results, published in May, showed an 18% year-over-year drop in revenue, prompting stock to drop by almost 14%. Despite this, Brown said he remained optimistic, pointing out that Beyond Meat had met its revenue objective while successfully reducing expenses. He appears similarly upbeat about the company’s Q2 results.
“We are pleased to report a strong quarter of progress against our 2024 plan, a pivotal year on our path to sustainable operations and profitability,” said Brown. “Key proof points include exceeding our Q2 revenue guidance; continued reduction in operating expenses and cash consumption; and our best quarterly gross margin since Q3 2021. Alongside the strengthening of our operations and product portfolio, we are working on bolstering our balance sheet.”
