Beyond Meat on Wednesday reported better-than-expected second-quarter sales despite continued weak demand for its plant-based burgers, chicken and other products.
The El Segundo, California-based company said its revenue fell nearly 9% to $93.2 million in the April-June period, better than the $87.8 million Wall Street expected, according to a survey of analysts conducted by FactSet.
Still, it was Beyond Meat’s ninth consecutive quarter of year-over-year sales declines as the company continues to battle consumer perceptions that its products are overly processed, unhealthy or simply not tasty. Beyond Meat said its sales volume fell 14% in the April-June period due to weaker retail and foodservice demand in U.S. and international markets.
Beyond Meat is trying to boost demand with new, healthier products. In the spring, the company launched Beyond Burger patties and Beyond Beef ground meat, which contain 60 percent less saturated fat than previous products. In June, a healthier sausage made with avocado oil followed.
And last month, the company launched the Beyond Sun Sausage, a product with peppers, spinach, lentils and other vegetables and fruits. Unlike previous products, Beyond Meat says the new sausage is not intended to imitate meat, but rather to be a healthier protein alternative.
Ethan Brown, president and CEO of Beyond Meat, said consumers and retailers have responded positively to the new recipes.
“The main reason this category has been destabilized has been the misperception about health,” Brown said Wednesday during a conference call with investors. “We are working on what we believe is the most important issue needed to get the entire category back on track.”
Brown said Beyond Meat is also making progress in streamlining its production and reducing costs. The company’s second-quarter gross margin of 14.7% was the highest since the third quarter of 2021.
Beyond Meat is trying to rely less on discounting and raised U.S. prices during the quarter as its new products hit the market, Brown said. But the company didn’t face much pushback from grocers, some of which increased their orders for the products.
“We think this is evidence that the product is doing well and the message is getting across,” Brown said.
But analysts on the conference call still questioned how the company plans to win back customers who may have tried its previous products but didn’t like them. Brown said it will take a while for perceptions to change, but this time, Beyond Meat has the support of many doctors, dietitians and nutritionists who praise the health benefits of the reformulated products.
“It’s not necessary that everyone likes the product. Enough people have to like it, and that’s a very big market,” Brown said.
Beyond Meat reduced its net loss to $34.4 million, or 53 cents per share, from $53.5 million a year earlier, in line with analyst forecasts.
The company also revised its full-year revenue forecast on Wednesday. It now expects revenue in the range of $320 million to $340 million. It had previously forecast revenue between $315 million and $345 million.
Beyond Meat shares, which had fallen 66% over the past 12 months, rose about 1.5% in after-hours trading following the release of the earnings report.
