Beyond Meat surpasses Q2 expectations despite declining Sales

USA – Beyond Meat exceeded Wall Street’s forecasts for the second quarter of 2024, despite continuing its streak of year-on-year revenue declines. 

The plant-based meat producer reported US$93.2 million in revenue for the April-June period, surpassing both the US$87.8 million projected by analysts and the company’s own guidance of $85-90 million.

However, the overall demand for plant-based meat continues to weaken, both in the U.S. and internationally, which Beyond Meat’s CEO Ethan Brown attributes to what he calls a “sustained misinformation campaign” by the traditional animal protein industry. 

This decline in demand resulted in an 8.8% drop in revenue compared to the same quarter last year, driven largely by a 14% decrease in product volume. 

Despite this, the introduction of higher-priced products, such as the Beyond IV line and the new US$10 Sun Sausages, contributed to a 6.1% increase in net revenue per pound. Quarter-over-quarter, sales rose by 23%.

A significant improvement in Beyond Meat’s gross margin was a highlight of the Q2 earnings report, with the margin reaching 14.7%, a marked increase from 2.2% in Q2 2023 and 4.9% in Q1 2024. 

The company anticipates further margin improvements throughout the remainder of the year.

In the U.S. retail sector, Beyond Meat saw a 7.5% decline in revenue, although per-pound revenue increased by 20.5% due to the rollout of Beyond IV beef mince, burgers, and sausages. 

In contrast, the foodservice sector experienced a 19% revenue drop, largely due to higher trade expenses with major restaurant partners, which diminished the impact of price increases.

Internationally, Beyond Meat faced a 12% drop in retail sales, driven by weak demand for its vegan chicken in the European market. 

The company is now focusing on expanding distribution, particularly in Germany, where it recently secured a presence in the refrigerated aisle—a critical factor in the German market, where over 95% of plant-based meat is sold chilled.

Despite reducing net losses by nearly 36% from a year ago, Beyond Meat remains heavily in debt and continues to work towards cash flow-positive operations, though this goal is unlikely to be achieved within the year. 

The company has updated its revenue guidance for 2024 to a range of US$320-340 million, reflecting cautious optimism for the rest of the year.