Beyond Meat on Thursday reported better-than-expected fourth quarter sales despite flagging consumer demand and lower prices.
The plant-based meat maker said its revenue fell 21% to $80 million in the October-December period. Still, that beat Wall Street’s expectations. Analysts polled by FactSet were forecasting revenue of $75.8 million.
Beyond Meat’s shares jumped 14% in after-hours trading.
The El Segundo, California-based maker of plant-based burgers, sausages, nuggets and other products said its sales volumes continued to decline despite price cuts in the U.S. and Europe. The strong dollar also hurt profits from abroad, the company said.
Beyond Meat’s net loss narrowed to $66.9 million for the quarter, or $1.05 per share. That also beat Wall Street’s forecast of a $1.18 per-share loss.
Beyond Meat President and CEO Ethan Brown said the company is seeing progress in its drive to cut costs and manufacturing complexity. Beyond Meat cut 200 jobs __ or 19% of its workforce __ in October and has narrowed its North American contract manufacturers from eight to three. It also reduced inventory.
Those savings __ along with easing costs for raw ingredients __ should help Beyond Meat tackle one of its most persistent problems: the high cost of its products relative to animal-based meat. On Thursday, Walmart was advertising Beyond Meat burgers at $9.68 per pound; lean ground beef was $5.86 per pound.
High prices were one the reasons for a broader slowdown in demand for fresh plant-based meats like burger patties and sausages last year, as shoppers confronted overall inflation at the grocery. U.S. sales of fresh meat alternatives fell 11% in 2022, wiping out the 11% gain they had seen in 2021, according to NielsenIQ.
Brown said the “drummed-up misperception” that plant-based meats are over-processed and unhealthy has also hurt sales, and the company intends to do more marketing and outreach to consumers about the health benefits of a plant-based diet, including lower cholesterol.
Brown also said Beyond Meat plans new products with improved taste this year. The company got a boost this month when McDonald’s introduced plant-based McNuggets in Germany. The McNuggets are the second product McDonald’s has co-produced with Beyond Meat; it also sells a McPlant burger in several European markets.
“This category will win over time on three things. It will win around taste. It will win around a proper understanding of the health benefits that our products provide. And on price,” Brown told investors during a conference call Thursday.
Beyond Meat said it expects net revenue in the range of $375 million to $415 million this year, which would be lower than the $418 million in reported in 2022.
The company said grocery price inflation and concerns about a recession could hurt sales in the first half, but it should see some improvement as the year progresses.