Beyond Meat CEO Admits Long Road To Turnaround, Pins Hopes On Shrinking Debt And Product Changes: Retail Stays Bearish

• Beyond Meat CEO Ethan Brown acknowledged that the turnaround pace is slow and that the company has faced ongoing hurdles, including misinformation about faux meat.
• The company reported its quarterly results on Monday, which missed expectations, and issued a soft revenue forecast for the fourth quarter.
• BYND stock declined 9% the next day, while Stocktwits sentiment remained in 'bearish' territory.

Beyond Meat, Inc. CEO Ethan Brown has admitted the company has "been in our turnaround phase for too long," saying that investors will see more action than talk as the faux meat seller targets a revival. However, the candid commentary failed to lift the investor sentiment.

Dire Situation

Once seen as a pioneer, Beyond Meat has struggled to find takers for its plant-based burger patties, stakes, and sausages amid shifting eating habits and perceptions that its products are costlier than real meat. Its sales have declined over the last three years, and the stock is now a fraction of its peak of over $230 just after its May 2019 initial public offering.

Ethan continued in the sombre tone: "We are acutely aware of having more challenges to overcome, more misinformation to counter, more cost to cut, and more margin to expand.

On Monday, Beyond Meat reported its quarterly financials, which showed a sharp decline in sales and a wider net loss. Its fourth-quarter revenue forecast also fell short of Wall Street expectations, and an $81.2 million impairment charge made the whole thing look even worse.

BYND stock dropped 9% to $1.22 on Tuesday and then fell further in the after-market session. Even the meme interest in the stock, after it jumped some 1,350% in three days last month, appeared to be waning. On Stocktwits, BYND has yet to break out from a 'bearish' retail sentiment reading that has been consistent since the start of the month.

Growth Initiatives

However, some users praised the analyst call and specific improvements in the company's balance sheet, with a bullish user saying, "I smell a solid reversal coming."

Beyond Meat disclosed that it had completed a major debt restructuring with bondholders, reducing debt by approximately $900 million (nearly 75% of total leverage) and raising almost $150 million through an at-the-market (ATM) program. The company is also consolidating retail distribution into "brand blocks" in frozen sections and targeting health-focused foodservice operators.

"The unplanned and at times chaotic transition, replete with long periods without product availability at all, followed by consumers' lack of awareness regarding new placement, has been damaging to our business," Brown admitted.

He also emphasised a better marketing effort: "We continue to address misinformation surrounding our plant-based needs. As many of you are aware, as industrial livestock and pharmaceutical interests rally around scare tactics and misinformation to confuse consumers, we are driving the health profile of our products to greater heights."

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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