Beyond Meat Inc. said it plans to lift product prices and slash expenses this year after quarterly revenue topped the average of analysts’ estimates.
The company, which provides plant-based meat alternatives to top fast-food outlets like McDonald’s and Yum Brands, said it planned to raise prices on some products beginning in the second quarter to improve its margins.
Beyond Meat: Big Price Hike
“Prices will vary by channel and product, but we expect these moves to meaningfully improve our margins throughout the year,” Chief Executive Ethan Brown said on a post-earnings conference call.
Previously, Beyond Meat had cut prices to narrow the price differential with animal-derived meat, targeting price-cautious American consumers, particularly because domestic demand has been declining.
The company projects its gross margin into the mid-to-high teens for 2024, representing a major improvement from -24.1% in 2023. This improvement is predicted based on the expectation of aggressive cost-cutting measures, involving eliminating its product line for Beyond Meat Jerky.
BTIG analyst Peter Saleh said: “Beyond Meat is currently going through a significant organizational realignment and has set goals for a turnaround. It’s early in the process of stabilizing the company for long-term success, and, as such, the targets are uncertain.” ‘Guarded Optimism’ “We’re cautiously optimistic,” Brown said. “There have been some headwinds, but this strategic shift really positions us to have a stable foundation for future growth.”
Third Bridge analyst John Oh said the Beyond IV beef patties, which will launch soon in U.S. retail, could well drive interest back up from customers, especially those who have been turned away from health sensitivities or poor perceptions of the quality of Beyond Meat ingredients.
The volume of products for the company went up by 8% in the quarter ending December 31, as compared with the 3.5% that was recorded in the previous quarter.
LSEG data showed fourth-quarter net revenues falling 7.8% to $73.7 million (€68.49 million), which analysts forecast at $66.7 million (€62.07 million).
Stock prices: In Wednesday’s premarket session (February 28)), shares of Beyond Meat were up 56%.
Ortex data shows that 37.6% of Beyond Meat’s free float was shorted, valued at $172.6 million as of Monday.
Read about: UK Vegan Cheese Brands are high in Salt, a study finds.