Beyond Meat (BYND) reported fourth-quarter and full-year 2022 earnings results that slightly beat Wall Street estimates on Thursday, driving shares higher, up more than 15% in aftermarket trading.
The plant-based protein giant posted a 20.6% year-on-year revenue decline in the fourth quarter, as it failed its tests last year with fast food giants such as KFC and McDonald’s. Full-year 2022 revenue was down 9.8% to $418.9 million. However, CEO Ethan Brown said the brand is “making solid progress” in its “transition to a sustainable growth model, one that emphasizes achieving cash flow positive operations in the second half of 2023.”
Here’s what Beyond Meat reported, compared to Wall Street estimates, according to Bloomberg consensus estimates:
Beyond Meat is focused on its three primary pillars, Brown said, including driving margin recovery and reducing operating costs, reducing inventory levels and generating cash flow, and placing a “greater emphasis on retail and foodservice growth drivers in the short term, while also providing strategic support.” important long-term partners and opportunities.”
In late October, Beyond Meat announced plans to cut costs and pursue cash flow operations in the second half of 2023, coinciding with the announcement of a 19% headcount reduction.
In the release, Brown said the fourth-quarter results “clearly demonstrate the execution” of the plan laid out last fall, “including solid sequential progress on margin recovery and operating expense reduction, and continued inventory taking.”
Highlights of the fourth quarter, according to the release, include industry exposure thanks to innovations such as Beyond Steak, in addition to the launch of plant-based McPlant Nuggets in Germany earlier this week. That offer is part of its three-year partnership with McDonald’s (MCD), which is now just days away from its two-year anniversary. In September 2021, McDonald’s announced its plan to test its first-ever plant-based burger, the McPlant.
In the release, there was no mention of the status of the partnership with KFC (YUM), Beyond Chicken.
In terms of retailers, Beyond Meat is currently offered at Kroger (KR), Walmart (WMT), Publix Super Markets, Costco (COST), Whole Foods (AMZN), and Target (TGT).
For its full year 2023 outlook, the company expects net sales to be between $375 million and $415 million, a decrease of 10% to 1% compared to 2022. Gross margin is expected to be in the range of low double digits. It expects to incur $250 million in operating expenses, “slightly more weighted toward the first half of the year.”
The company did note “unforeseen effects” that could affect the company’s results, including “near-term uncertainty related to macroeconomic issues” such as inflation and rising interest rates, “demand for the plant-based meat category , increasing concerns about the likelihood of a recession, increased competition, supply chain disruptions, labor availability challenges and, to a lesser extent, COVID-19 and its potential impact on consumer behavior and demand levels, among others.”
This is because demand for plant-based meats is generally lower as customers trade for cheaper protein options due to inflation.
Brown said he remains focused on becoming cash flow positive operations in the second half of 2023 and on the long-term prospects for the brand as it “navigates through the current circumstances”.
He said, “We remain strongly focused on positioning Beyond Meat to capitalize on the tremendous opportunity to become a major protein supplier to the $1.4 trillion meat industry.”
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Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.
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