Beyond Meat’s net losses have widened due to a $77.4m third-quarter impairment charge, while the company pointed to a further drop in sales through the year-end.
For the three months to 27 September, the California-based alternative protein producer reported a net loss of $110.7m, compared to a $26.6m loss a year earlier.
Beyond Meat, which has not posted a net profit since it went public in 2019, warned of a “material” pending impairment announcement in October.
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The company confirmed in its third-quarter results presentation yesterday (10 November) that the charges were related to some “long-lived assets”.
Other cited factors included the “suspension and substantial cessation” of Beyond Meat’s operations in China – revealed in February – “certain non-routine SG&A expenses”, and “incremental arbitration-related legal expenses”.
Nasdaq-listed Beyond Meat also reported a 13.3% decrease in sales, which at $70.2m came within its targeted range of $68-$73m forecast at the second-quarter results stage in August.
However, the company projected sales in the current fourth quarter of $60-65m, below the $76.7m recorded in the same three months of fiscal 2024.
President and CEO Ethan Brown said Beyond Meat is taking “strong measures to accelerate our path to sustainable operations, including pursuing further and sizable cost reductions, gross margin expansion investments and targeted strategic growth initiatives”.
He added: “Though category headwinds and an accompanying softer top-line continue to weigh on and reverberate throughout our current performance, including our Q3 results, we are closing out the year with a much improved balance sheet, important transformation spadework underway, and genuine optimism and excitement regarding our future.”
Nevertheless, Beyond Meat’s volumes dropped in both the third quarter and for the year to date, with the largest decreases seen in US retail and foodservice.
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By GlobalDataUS retail sales volumes fell 12.6% in the quarter and were down 27.1% in the out-of-home channel. International retail volumes dropped 12.5% but those for foodservice edged up 4.4%.
Meanwhile, Beyond Meat’s operating losses widened to $112.3m, with an operating margin of minus 160%, versus a $30.9m loss and a negative 38.2% margin a year earlier.
Over the first nine months of the year, revenue fell 14.4% to $213.9m. The operating loss widened to $203.4m from a $118.3m loss, while net losses deepened to $192.8m from $115.4m in the same period last year.
On the outlook, the company said it “continues to experience an elevated level of uncertainty within its operating environment”, which could have “unforeseen impacts” on its actual realised results.
Amid the challenges, Beyond Meat’s shares have dropped more than 65% this year and closed trading yesterday at $1.34. The company has seen a significant dilution of its share price since it announced and then completed a debt-for-equity swap.
Beyond Meat said yesterday that as of 27 September, net debt stood at $1.2bn.
Brown added: “As we approach the end of 2025, we’ve achieved three important building blocks for our broader transformation efforts.
“These are significantly reducing our overall leverage in connection with the previously announced exchange of substantially all of our 2027 convertible notes; meaningfully extending our debt maturity; and finally, adding substantial liquidity to our balance sheet.”
