Plant-based Beyond Meat is facing major headwinds – despite the curiosity of some people looking for a meat alternative amid the closure of its meat packing plant amid the Covid pandemic.
Multiple industry analysts are sounding the warning bells of impending disaster as the company posts a net loss of $100 million in May and sees multi-year partnerships with brands like McDonald’s and Taco Bell spark moderate enthusiasm — as stock is down 74 percent in the past year. decreased .
May’s report was just the latest admission that Beyond Meat isn’t living up to the high expectations it had set a few years ago. In its latest report, the company acknowledged that it “has a history of losses and that we may not be able to achieve or maintain profitability in the foreseeable future.”
Multiple industry analysts are sounding the warning bells of impending disaster as the company posted a net loss of $100 million in May. Pictured above, the company’s stock price over the past year
The bad vibes are also being felt within the company, as Bloomberg reported when CEO Ethan Brown told employees 40 jobs had been eliminated as part of an effort to cut costs. An agreement with McDonald’s (above) has not helped the company
All of this has translated into some stomach upsets for investors, with a huge bite of Beyond Meat’s stock prices, which peaked at over $234 a share in July 2019, started declining steadily a year ago, and now trades at around $234 per share. $32. Overall, the stock has fallen 74% in the past year.
The bad vibes are also being felt within the company, as Bloomberg reported when CEO Ethan Brown told employees 40 jobs had been eliminated as part of an effort to cut costs.
“Although difficult, this decision is part of our larger strategy to reduce operating costs and support sustainable growth,” Brown wrote.
Beyond Meat looked poised to dominate the fake meat market after it announced a three-year partnership with McDonald’s in early 2021, as well as agreements with major fast food players such as KFC, Dunkin’ Donuts and Subway.
But none of the test runs have resulted in long-term success, with many of Beyond Meat’s partners not expanding their plant-based options to more restaurants or eliminating menu items entirely. Sales of McDonald’s McPlant products have reportedly been disappointing in many locations, and some restaurants no longer serve it at all.
In its latest report, the company acknowledged that it “has a history of losses and that we may not be able to achieve or maintain profitability in the foreseeable future.” Pictured above, the company’s stock price over the past five years
“Beyond Meat has to drastically cut costs and reduce cash flow or it will go bankrupt,” wrote David Trainer, CEO of New Constructs. Pictured above, Kim Kardashian, who was recently hired as a flavor consultant for the brand in online advertisements
The company partnered with Kim Kardashian this year, in which she ate some of her products for online advertising.
As bad as things have been, there may be worse on the horizon. Market overview cited a recent analysis by independent equity research firm New Constructs that listed Beyond Meat as a “zombie stock” that could soon reach $0 a share.
“Beyond Meat has to drastically cut costs and reduce cash flow or it will go bankrupt,” wrote David Trainer, CEO of New Constructs. “Companies with a lot of money and little cash are risky in any market, but especially now.”
“With only $548 million in cash and cash equivalents on balance sheet at the end of 1Q22, Beyond Meat’s cash balance was able to sustain its cash burn for just 10 months after 1Q22. Raising additional capital to fund further cash burn would likely be costly and bad news for existing and new shareholders.’
The company is expected to release its latest quarterly report after markets close on Thursday. The latest report, released in May, showed a company experiencing stagnant revenue and a declining share price.
In that report, business leaders acknowledged that they had dropped revenues and identified several issues that could further hurt business. These include the launch of new products, namely Beyond Meat Jerky, with lower profit margins than previous products and weak retail demand.
Company officials also said they expect to continue to feel the impact of Covid and the associated public health measures in the future – in addition to inflation and the downturn in the supply chain.
Partnerships with McDonald’s, Taco Bell and KFC (see above) did not materialize as the company had predicted