Beyond Meat continues to face significant challenges in the food manufacturing landscape, as its net losses have widened, driven by a $77.4 million impairment charge in the third quarter. Furthermore, a decline in sales is expected as the year concludes.
For the three months ending on September 27, the California-based alternative protein producer reported a net loss of $110.7 million, contrasting with a loss of $26.6 million during the same period last year.
Since going public in 2019, Beyond Meat has not achieved a net profit, and the company has warned of a “material” upcoming impairment announcement in October.
In its third-quarter results presentation on November 10, the company confirmed that the impairment charges were associated with certain “long-lived assets.”
Additionally, other factors contributing to this downturn included the “suspension and substantial cessation” of Beyond Meat’s operations in China, which was revealed in February, alongside “certain non-routine SG&A expenses” and “incremental arbitration-related legal expenses.”
Beyond Meat also reported a 13.3% decrease in sales, which amounted to $70.2 million, aligning with its targeted forecast of $68-$73 million made during the second-quarter results stage in August.
However, the company projects fourth-quarter sales to be between $60 million and $65 million, falling short of the $76.7 million recorded during the same quarter of fiscal 2024.
President and CEO Ethan Brown stated that 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 further emphasized, “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.”
Despite these efforts, Beyond Meat’s volumes decreased in both the third quarter and year-to-date, with the most significant declines occurring in US retail and foodservice segments.
For instance, US retail sales volumes dropped 12.6% in the quarter, while out-of-home channel volumes fell 27.1%. However, international retail volumes experienced a decline of 12.5%, but foodservice volumes saw a slight increase of 4.4%.
Moreover, Beyond Meat’s operating losses widened to $112.3 million, resulting in an operating margin of minus 160%, compared to a loss of $30.9 million and a negative margin of 38.2% from the previous year.
In the first nine months of the year, revenues decreased by 14.4% to $213.9 million. The operating loss expanded to $203.4 million from $118.3 million, while net losses deepened to $192.8 million from $115.4 million during the same period last year.
Looking ahead, the company acknowledged that it “continues to experience an elevated level of uncertainty within its operating environment,” which may have “unforeseen impacts” on actual results.
In light of these challenges, Beyond Meat’s shares have plummeted more than 65% this year, closing trading yesterday at $1.34. The company has faced significant dilution of its share price since announcing and subsequently completing a debt-for-equity swap.
As of September 27, Beyond Meat reported a net debt of $1.2 billion.
Brown further remarked, “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.”
