Beyond Meat slides as its streak of unprofitable quarters extends

[Beyond Meat headquarters in El Segundo, California, USA.]
JHVEPhoto

Beyond Meat (BYND [https://seekingalpha.com/symbol/BYND]) reported revenue fell 13.3% year-over-year to $70.2 million in Q3. The decrease in revenue was primarily driven by a 10.3% decrease in volume of products sold, and a 3.5% decrease in net revenue per pound. The decrease in volume of products sold was primarily driven by weak category demand, reduced points of distribution in the U.S. retail channel, and lower sales of burger products to restaurant customers in the international food service channel

The company's adjusted EBITDA loss widened to $21.6 million from a loss of $19.8 million a year ago. Beyond Meat's gross profit margin plunged to 10.3% of sales from 17.7% in the year-ago period. Expenses related to the suspension and substantial cessation of the company’s operational activities in China factored into the gross margin contraction. Q3 EPS was reported at -$0.47, which missed the consensus estimate of -$0.43 and extended the streak of Beyond Meat (BYND [https://seekingalpha.com/symbol/BYND]) never reporting a profitable EPS quarter since it went public in 2019.

Looking ahead, CEO Ethan Brown said Beyond Meat (BYND [https://seekingalpha.com/symbol/BYND]) has identified key important building blocks for the company's broader transformation efforts. "These are significantly reducing our overall leverage in connection with the previously announced exchange of substantially all of our 2027 convertible notes; meaningfully extending our debt maturity; and finally, adding substantial liquidity to our balance sheet," he highlighted.

He said Beyond Meat (BYND [https://seekingalpha.com/symbol/BYND]) is also taking strong measures to accelerate its path to sustainable operations, including pursuing further and sizable cost reductions, gross margin expansion investments and targeted strategic growth initiatives.

On Seeking Alpha, analyst Bill Maurer [https://seekingalpha.com/author/bill-maurer] noted that unfortunately Beyond Meat (BYND [https://seekingalpha.com/symbol/BYND]) guided Q4 sales to be in a range of $60 million to $65 million, well below the street's average estimate for $70.33 million. "Management seems excited about its future, but the results just aren't there yet," he noted. Maurer also pointed out that BYND tapped its at-the-market sales program in Q4, raising another nearly $150 million in capital, but it resulted in further dilution of more than 59 million shares. "The company's balance sheet is stronger as a result, but current shareholders are seeing their ownership percentages shrink further," he warned.

Shares of Beyond Meat (BYND [https://seekingalpha.com/symbol/BYND]) fell 9.0% in postmarket action on Monday.

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