Beyond Meat keeps losses in check with cost cuts; shares rise
2023.05.10 17:29
© Reuters. FILE PHOTO: Products from Beyond Meat Inc, the vegan burger maker, are shown for sale at a market in Encinitas, California, U.S., June 5, 2019. REUTERS//File Photo
(Reuters) -Beyond Meat reported upbeat quarterly results on Wednesday as the plant-based meat company benefited from easing supply chain pressures and cost controls, sending its shares up 9% in extended trading.
The company has cut jobs, restructured certain contracts, ramped up automation in its manufacturing processes and also tightened its sourcing network in its bid to keep a tight lid on costs.
The 200 layoffs in October were estimated to save about $39 million over the next 12 months.
Lingering industry-wide supply chain challenges, the Russia-Ukraine war and rising inflation had raised the company’s freight, commodity and labor expenses but Beyond Meat (NASDAQ:) has started to see these costs ease in recent months.
However, the company said most markets and channels were negatively impacted by continued softness in demand in the plant-based meat category as inflation-hit consumers tighten their purse strings.
Beyond Meat added it intends to assume distribution responsibilities for Beyond Meat Jerky from the fourth quarter of 2023 and expects this to support its gross margins.
Total operating expenses in the first quarter fell to $63.9 million, from $97.8 million a year earlier.
The company’s net loss narrowed to $59 million, or 92 cents per share, in the first quarter, from $100.5 million, or $1.58 per share, last year.
Analysts on average expected the company to post a loss of $1.01 cents per share, as per Refinitiv IBES data.
Net revenue fell 15.7% to $92.2 million in the first quarter but beat expectations of $90.8 million.
