Beyond Meat says return to growth did not materialize amid consumer headwind

CEO Ethan Brown stated: “We expected a modest return to growth in the third quarter of 2023, which did not materialize as category-specific and broader consumer headwinds continued and drove weaker-than-expected sales volumes, reduced promotional effectiveness and adverse changes in our product sales mix… We are pursuing five main actions to improve our cost structure and overall operating performance. One, as previously announced, we are executing a 19% reduction in our global non-production employee base, immediate step in a broader program to improve our cost structure; two, we are reviewing our pricing strategy with certain channels to support margin expansion; three, we are continuing to utilize inventory management to reduce working capital; four, we are intensifying our focus on channels and geographies that are exhibiting revenue growth; and five, in U.S. retail, we are using our portfolio and marketing to directly counter misinformation about our products and category… As we look to 2024, we expect to implement a more nuanced pricing strategy, keeping certain programs and pricing in place, while adjusting others in support of gross margin expansion. Inventory management, we intend to continue to manage inventory levels down to generate cash. We’ve made some progress in this regard as inventory levels have fallen by 21% year-over-year, yet we have many miles left to travel as we seek to bring inventory in line with lean management principles. Commercial focus on current growth markets and channels, we are encouraged by and are investing in markets and partnerships that are currently exhibiting growth. This includes select markets in Europe and in particular, certain strategic partners where we are experiencing year-over-year double-digit growth.” Comments taken from Q3 earnings conference call.