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01/11 03:36
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reflects significant challenges: declining revenues, shrinking margins, and a substantial net loss. While there are efforts to optimize costs and achieve EBITDA positivity, these are not yet realized. The Q&A section highlighted management's inability to provide clear cash balance details, raising concerns about financial transparency and liquidity. Despite some operational improvements and future plans, the immediate outlook remains bleak, with ongoing financial and market struggles leading to a negative sentiment.
Net Revenue $70.2 million, a 13.3% decline year-over-year, due to ongoing category challenges, less favorable product mix, and higher trade promotion spending.
Gross Margin 10.3%, down from 17.7% in the year-ago period, impacted by lower volumes, reduced fixed cost absorption, and $1.7 million in noncash charges related to the suspension of China operational activities.
U.S. Retail Net Revenue $28.5 million, an 18.4% decline year-over-year, driven by a 12.6% decrease in product volume and a 6.6% decrease in net revenue per pound due to higher trade discounts and price decreases.
U.S. Foodservice Net Revenue $10.5 million, a 27.3% decline year-over-year, primarily due to a 27.1% decrease in product volume, weak category demand, and the lapping of a limited-time offering in the prior year.
International Retail Net Revenue $15.8 million, a 4.6% decline year-over-year, driven by a 12.5% decrease in product volume, partially offset by a 9.1% increase in net revenue per pound due to favorable foreign currency exchange rates and price increases.
International Foodservice Net Revenue $15.3 million, a 2.3% increase year-over-year, driven by a 4.4% increase in product volume, partially offset by a 2% decrease in net revenue per pound due to changes in product sales mix.
Gross Profit $7.2 million, down from $14.3 million in the year-ago period, impacted by lower volume, higher trade discounts, and increased material costs.
Operating Expenses $119.6 million, including $77.4 million in non-cash impairment charges related to long-lived assets, and $2.1 million in non-routine items. Excluding these, operating expenses decreased due to reduced marketing and salaries.
Net Loss $110.7 million, compared to $26.6 million in the year-ago period, driven by the aforementioned impairment charges and reduced sales.
Adjusted EBITDA Loss of $21.6 million (-30.8% of net revenues), compared to a loss of $19.8 million (-24.4% of net revenues) in the year-ago period.
Cash and Cash Equivalents $131.1 million, with total outstanding debt of approximately $1.2 billion as of September 27, 2025.
Net Cash Used in Operating Activities $98.1 million for the first 9 months of 2025, compared to $69.9 million in the year-ago period, reflecting reduced sales, gross profit, and non-routine factors.
Capital Expenditures $9.3 million for the first 9 months of 2025, compared to $4.5 million in the year-ago period, reflecting increased investments in manufacturing capabilities.
Beyond Pork platform and Beyond Steak: Products deliver on taste with improved ingredient and nutritional profiles, earning accreditations from organizations like the American Diabetes Association and American Heart Association.
Beyond Chicken Pieces: Achieved taste and nutrition accolades, delivering 21 grams of protein per serving with 0 cholesterol and less than 1 gram of saturated fat.
Beyond Steak Filet: Provides 28 grams of protein with 0 cholesterol and only 1 gram of saturated fat, made with heart-healthy avocado oil.
Beyond Ground platform: Features 27 grams of protein and 4 grams of fiber per serving, made with only 4 ingredients, and offers seasoned varieties like Tuscan Tomato and Korean Barbecue.
U.S. Retail Distribution: Rebuilding distribution and consolidating brand blocks in frozen sections of supermarkets. Expanded availability of products like the Beyond Burger 6-Pack at over 2,000 Walmart stores.
U.S. Foodservice Strategy: Adjusting strategy to target health-focused institutions and restaurant chains, with plans to grow as animal protein prices rise.
Cost Reduction Initiatives: Implemented actions to reduce operating expenses and improve margins, including exiting unprofitable product lines and optimizing supply chain costs.
Transformation Office: Appointed a Chief Transformation Officer to accelerate cost-cutting and operational efficiency efforts.
Debt Reduction: Reduced debt levels by approximately $900 million, representing nearly 75% of total leverage, with plans to potentially convert another $209 million.
Strategic Initiatives: Exploring growth opportunities in U.S. and European markets, though details are not yet disclosed.
Balance Sheet Activities: The company has reduced debt levels by approximately $900 million, nearly 75% of total leverage, and extended the maturity of most of its debt profile. However, the company remains in a turnaround mode, facing challenges in achieving sustainable operations and growth.
Revenue Decline: Net revenue declined by 13.3% year-over-year to $70.2 million, driven by ongoing category challenges, less favorable product mix, and higher trade promotion spending. Lower volumes also reduced fixed cost absorption.
Gross Margin Pressure: Gross margin fell to 10.3% from 17.7% in the prior year, impacted by lower volumes, higher trade discounts, and a $1.7 million noncash charge related to the suspension of China operations.
Operating Expenses: Operating expenses included a $77.4 million noncash impairment charge related to long-lived assets and other nonroutine expenses, making cost-cutting efforts appear less impactful.
Category Challenges: The plant-based meat category continues to face demand softness, misinformation campaigns, and competitive pressures, which have negatively impacted sales and consumer perception.
Distribution Issues: The transition of products from refrigerated to frozen sections in supermarkets has caused disruptions, including periods of unavailability and consumer confusion, leading to reduced sales.
International Market Weakness: Two of the top three European markets are experiencing year-over-year declines, reflecting the global reach of the soft macroeconomic environment in the plant-based meat category.
U.S. Foodservice Decline: Net revenues in U.S. foodservice decreased by 27.3%, driven by weak category demand and the lapping of a limited-time offering in the prior year.
Supply Chain and Cost Challenges: Higher materials costs, inventory provisions, and reduced fixed cost absorption have increased the cost of goods sold. Efforts to optimize supply chain and reduce costs are ongoing but not yet fully realized.
Debt and Liquidity: Despite reducing debt, the company still has approximately $1.2 billion in total outstanding debt and faces challenges in achieving positive EBITDA and sustainable operations.
Revenue Expectations: Net revenues for the fourth quarter of 2025 are expected to be in the range of $60 million to $65 million, reflecting ongoing demand weakness in the plant-based meat category and the anticipated impact from distribution losses at certain QSR customers.
Margin Projections: The company is targeting a return to 30%+ gross margins through actions such as exiting unprofitable product lines, making targeted investments in facilities, and optimizing the supply chain.
Capital Expenditures: Capital expenditures for the first nine months of 2025 totaled $9.3 million, with investments aimed at improving production efficiency and expanding gross margins.
Market Trends: The plant-based meat category continues to face demand softness in key geographies, including the U.S. and parts of Europe. However, the company anticipates a potential renewal of interest in plant-based meats in the broader restaurant segment as the price of animal protein rises.
Business Segment Performance: The company is focusing on rebuilding distribution in U.S. retail and foodservice, consolidating brand offerings in the frozen section, and targeting institutions and restaurant chains that prioritize health and clean ingredients.
Strategic Plans: The company is implementing a transformation program to reduce operating expenses and expand margins. It is also exploring strategic initiatives to accelerate growth, particularly in U.S. and European markets, though details are not yet disclosed.
The selected topic was not discussed during the call.
The earnings call reflects significant challenges: declining revenues, shrinking margins, and a substantial net loss. While there are efforts to optimize costs and achieve EBITDA positivity, these are not yet realized. The Q&A section highlighted management's inability to provide clear cash balance details, raising concerns about financial transparency and liquidity. Despite some operational improvements and future plans, the immediate outlook remains bleak, with ongoing financial and market struggles leading to a negative sentiment.
The earnings call reveals several challenges: a significant revenue decline, shrinking gross margins, and increased legal costs, compounded by economic uncertainties and market saturation. Despite some efforts to stabilize and innovate, management's responses in the Q&A lacked clarity on addressing key issues, particularly in international markets. The lack of clear guidance and the ongoing suspension of China operations further contribute to a negative outlook. Although there are attempts to reduce costs and enhance operational efficiency, these are overshadowed by the broader financial struggles and market challenges.
The earnings call reveals several negative indicators: a decline in net revenues and gross margin, a significant net loss, and withdrawal of guidance due to uncertainty. Despite efforts to stabilize and expand, the market's reaction to the financing facility and potential dilution through warrants is likely negative. The Q&A section highlights management's vague responses and concerns about de-stocking and consumer perception, further contributing to a negative sentiment. Overall, these factors suggest a likely stock price decline in the range of -2% to -8% over the next two weeks.
The earnings call reveals several negative factors: declining revenues and gross profit, increased net loss, and withdrawal of guidance. Despite some positive aspects like reduced operating expenses and new product lines, the financial health is concerning with significant debt and a financing facility at high interest. The Q&A highlights uncertainties and management's lack of clear responses on key issues. These outweigh potential positives from product innovation and market expansion, leading to a negative sentiment for the stock price in the short term.
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