EL SEGUNDO, CALIF. — Beyond Meat is conducting a strategic review of its global operations as its sales situation deteriorates. In a Nov. 2 announcement, six days before releasing its third-quarter earnings on Nov. 8, the company revised its full-year outlook and said it was reviewing operations and cutting its non-production workforce by 19%.
“We anticipated a modest return to growth in the third quarter of 2023 that did not occur, reflecting further sector-specific and consumer headwinds,” said Ethan Brown, president and chief executive officer. “Even as we implement measures to address those headwinds that are within our sphere of influence, we intend to pursue a further, sizable reduction of operating expenses to improve our cost structure.”
With the goal of reducing operating expenses, the strategic review may include narrowing the company’s focus to certain growth opportunities and accelerating activities that prioritize gross margin expansion and cash generation, according to the company. The efforts may include the potential exit of select product lines; changes to the company’s pricing architecture within certain channels; accelerated, cash-accretive inventory reduction initiatives; further optimization of the company’s manufacturing capacity and real estate footprint; and a review and potential restructuring of the company’s operations in China.
The workforce reduction will include approximately 65 employees, representing 19% of Beyond Meat’s non-production workforce and 8% of its total global workforce.
This past August, Beyond Meat forecast full-year net revenues would be in a range of $360 million to $380 million. The company is now forecasting net sales for the year will be between $330 million and $340 million.
The company cited three reasons for the full-year outlook revision, including softness for plant-based meat alternatives in US retail and foodservice channels; lower-than-expected promotional effectiveness; and unfavorable changes in product sales mix, primarily reflecting weaker-than-expected sales of the company’s core products, namely, Beyond Burger, Beyond Beef and Beyond Sausage, relative to certain non-core products, including Beyond Steak, Beyond Chicken Tenders, Beyond Popcorn Chicken and Beyond Chicken Nuggets.