Published - October 14, 2022 @ 3:59 PM (EET)
In a strategic shift to achieve more sustainable growth, plant-based burger maker Beyond Meat Inc. (NASDAQ:BYND) is conducting further layoffs following a round of cuts made in August.
In part blaming inflation for slashing its workforce, Beyond Meat said consumers are forgoing plant-based foods in favor of cheaper meat as costs rise.
"Beyond Meat is implementing measures to drive more sustainable growth, emphasizing the achievement of cash flow positive operations within the second half of 2023," said President and CEO Ethan Brown.
Investors weren't impressed with the news, sending shares of the company down over 10% in premarket trading.
WHY IT MATTERS
Beyond Meat announced its plan to cut about 200 workers and said it's cutting other costs as it makes a strategic shift to achieve positive cash flow operations.
The 19% reduction also includes the embattled company's COO, Doug Ramsey, who has been on suspension after his arrest on allegations that he bit a man's nose during an altercation after a college football game.
Elsewhere, the company issued a material third-quarter sales warning and is now expecting revenue of about $82 million, down 23% from the year-ago period and far below estimates of about $114 million.
Down from prior guidance of $470 million to $520 million for the full year, it now expects revenue to range from $400 million to $425 million, a deceleration between 9% and 14%.
NOW WHAT
While the pandemic was a bonanza for the plant-based meat industry, the red-hot demand for Beyond's products hasn't lasted and major fast-food partnerships have failed to gain traction.
Through the first six months of 2022, Beyond Meat's free cash flow was a loss of $278 million.
The company said Thursday it expects to incur a one-time cash charge of about $4 million linked to the layoffs and an overall benefit of $27 million from cost-cutting activities.
