Shares of Beyond Meat, Inc. (NASDAQ: BYND) stayed red on Tuesday. The stock has dropped 19% over the past three months. The plant-based meat company continues to struggle in terms of generating profits and driving sustained growth. Its most recent quarterly performance did not provide much optimism. Here’s a look at some of the lingering challenges faced by the company and how it is working to overcome them:
Top and bottom line performance
Beyond Meat saw its revenues increase 4% year-over-year to $76.7 million in the fourth quarter of 2024. The top line growth was mainly driven by price increases for some products and was slower compared to the previous quarter. The outlook for the upcoming quarter suggests flat revenue growth, which does not provide much encouragement.
In addition, the company’s volumes continued to decline due to weak category demand, price elasticity effects, and lower sales of some products in international markets. Volumes declined across most of its segments in Q4, except for international foodservice which benefited from increased sales to a large quick service restaurant (QSR) customer in Europe.
BYND’s string of losses continued with a net loss of $0.65 per share in Q4. This was, however, narrower than the loss per share of $2.40 reported in the year-ago period. The company’s operating expenses were down 38% YoY in Q4 and it generated a gross profit of $10 million and gross margin of 13.1% which marked a significant improvement from the losses in the year-ago period.
Even as it battles various challenges, Beyond Meat continues to launch new products in regions like France and also expand its presence in other markets in Europe. It also continues to see demand for plant-based alternatives from health-conscious customers.
Job cuts and suspension of China operations
As part of its cost reduction efforts, Beyond Meat decided to reduce its workforce by around 6%. This is expected to generate approx. $5.5-6.5 million in cash compensation operating expense savings, and an additional non-cash savings of approx. $1.0-1.5 million in 2025.
The company also decided to suspend its operations in China, which are expected to cease by the end of the second quarter of 2025. The reduction of the Chinese workforce is expected to generate approx. $0.5-1.0 million in cash compensation operating expense savings in 2025.
Outlook
For the full year of 2025, Beyond Meat expects net revenues to range between $320-335 million. Revenues for the first quarter of 2025 are expected to be comparable to the prior-year period. Gross margin for the full year is expected to be approx. 20% while operating expenses are expected to range between $160-180 million.
In general, there is a mixed sentiment around Beyond Meat. While some experts are optimistic that growth might pick up in the long term helped by demand for meat substitutes, others do not share this sentiment and instead believe that the company’s current strategy is not sufficient to overcome its challenges.
