Beyond Meat to increase prices, cut costs 'steeply' in 2024; shares soar
Reuters
Published Feb 27, 2024 04:18PM ET
Updated Feb 27, 2024 06:53PM ET
By Juveria Tabassum
(Reuters) -Beyond Meat said it would ramp up product prices and "steeply reduce" costs this year after topping market expectations for quarterly revenue on Tuesday, sending its shares up 75% in extended trade.
About 40% of the company's shares were short at the end of January, as per LSEG data.
Beyond Meat (NASDAQ:BYND), which supplies its plant-based meat patties to fast food chains such as McDonald's (NYSE:MCD) and Yum Brands, said it would increase prices on some of its product lines from the second quarter in a bid to restore margins.
"Though varied across channels and product lines, we expect the overall impact of these pricing changes to meaningfully impact margin across the balance of the year," CEO Ethan Brown said on a post-earnings call.
In the past, the company had lowered prices to bridge the gap between faux meat and traditional protein to appeal to budget-conscious U.S. consumers, as demand lagged in the country.
It now expects gross margin in 2024 to be in the mid to high teens range, compared to gross margin of negative 24.1% in 2023, as it benefits from cost cut measures, including the discontinuation of its Beyond Meat jerky product line.
"We're cautious in our optimism. We've obviously had some tough years, but by making these changes and creating the sustainable baseline ... we're going to create some room for ourselves to get back on track for growth," Brown added.
The company's Beyond IV beef patties, which will be launched in U.S. retail channels, "bodes well" to regain consumers who moved away from the faux meat category due to health concerns and a negative consumer sentiment around Beyond Meat's ingredients, said John Oh, analyst at research firm Third Bridge.
Volumes rose 8% in the quarter ended Dec 31, compared to a 3.5% increase in the third quarter.
Net revenue for the fourth quarter fell 7.8% to $73.7 million, but topped analysts' average estimate of $66.7 million, as per LSEG data.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.