After Beyond Meat Inc. unveiled its quarterly results, its stock surged by nearly 75% in after-hours trading on Tuesday. The company’s projections for gross margins in the mid- to high-teens for 2024 greatly contributed to this boost.
Despite facing challenges in previous quarters, Beyond Meat reported a net loss of $155.1 million, or $2.40 per share, for the fiscal fourth quarter. This compared to a net loss of $66.9 million, or $1.05 per share, in the same quarter the previous year. Net revenue also saw a decline, dropping to $73.7 million from $79.9 million year-over-year.
However, the company’s performance exceeded analyst expectations. On average, analysts surveyed by FactSet had anticipated a net loss of 89 cents per share on revenue of $66.7 million.
Beyond Meat, classified as a small cap company with a market value of $480.8 million, provided sales guidance for fiscal 2024 in the range of $315 million to $345 million. This guidance slightly surpassed the $344.4 million forecasted by FactSet analysts.
During the earnings call, Chief Executive Ethan Brown outlined significant measures aimed at reshaping Beyond Meat’s trajectory over the next 12 to 18 months to achieve growth. These measures include reducing operating costs and cash usage, implementing lean management principles, optimizing production for quality and margin improvements, and adjusting pricing strategies to support margin expansion.
John Oh, an analyst at Third Bridge, expressed optimism regarding Beyond Meat’s fourth-quarter results, seeing them as positive strides towards aligning the company’s operations with the current landscape of the plant-based meat category. These steps indicate a strategic effort to return to growth and enhance overall performance moving forward.
According to John Oh, an expert in the plant-based field, Beyond Meat “needs to get in survival mode,” emphasizing the importance of cost-saving initiatives and manufacturing optimization efforts given the current state of the sector. Oh conveyed this sentiment in an email, highlighting the critical nature of these measures for Beyond Meat’s success.
Despite initially surging by more than 100% in after-hours trading on Tuesday, Beyond Meat’s shares experienced a slight pullback, ultimately closing up 74%. Over the past year, the stock has seen a significant decline of 58%, in contrast to the broader S&P 500 index, which has advanced by 28%. This fluctuation underscores the volatility and challenges faced by Beyond Meat and the plant-based industry as a whole.