Plant-based Beyond Meat is facing strong headwinds, despite the curiosity of some people looking for an alternative to meat during the closure of meat packaging plants due to the Covid pandemic.
Several industry analysts are sounding alarm bells of an impending disaster as the company posted a net loss of $ 100 million in May and sees multi-year partnerships with brands like McDonald’s and Taco Bell sparking lackluster excitement, as its shares are dropped 74% in the past year.
May’s report was just the latest admission that Beyond Meat is not meeting the high expectations it set just a few years ago. The company acknowledged that it has “a history of losses and may not be able to achieve or sustain profitability” in the near future in its latest report.
Several industry analysts are sounding alarm bells of an impending disaster as the company posted a net loss of $ 100 million in May. In the photo above, the company’s share price over the past year
Negative vibes are also felt within the company, as Bloomberg reported that CEO Ethan Brown told employees that 40 jobs have been eliminated as part of an offer to cut costs. A deal with McDonald’s (above) didn’t help the company
All of this has resulted in some stomach upsets for investors, with a huge bite to Beyond Meat’s stock prices, which peaked in July 2019 at over $ 234 per share, started to decline steadily a year ago and now they are trading at around $ 32. Overall, the stock has dropped 74% over the past year.
Negative vibes are also felt within the company, as Bloomberg reported that CEO Ethan Brown told employees that 40 jobs have been eliminated as part of an offer to cut costs.
“While difficult, this decision is part of our broader strategy to reduce operating expenses and support sustainable growth,” Brown wrote.
Beyond Meat looked poised to dominate the mock meat market after announcing a three-year partnership with McDonald’s in early 2021, as well as deals with major fast food outlets like KFC, Dunkin ‘Donuts, and Subway, among others.
But none of the tests have been successful in the long term, with many of Beyond Meat’s partners not expanding their plant-based options to more restaurants or eliminating menu items altogether. Sales of McDonald’s McPlant product have reportedly been disappointing in many locations and some restaurants have stopped serving it altogether.
The company acknowledged that it has “a history of losses and may not be able to achieve or sustain profitability” in the near future in its latest report. In the photo above, the company’s stock price over the past five years
“Beyond Meat must drastically cut costs and reduce money consumption, or it will fail,” wrote New Constructs CEO David Trainer. Pictured above, Kim Kardashian, who was recently hired as a flavor consultant for the brand in online advertising
The company partnered with Kim Kardashian this year, in which she ate some of its products for online advertising.
As bad as things have gone, there may be worse on the horizon. Market Watch cited a recent analysis by independent equity research firm New Constructs in which Beyond Meat was listed as a “zombie stock” that could soon hit $ 0 per share.
“Beyond Meat must drastically cut costs and reduce money consumption, or it will go bankrupt,” wrote New Constructs CEO David Trainer. “Companies with a high consumption of money and little liquidity available are risky in any market, but especially now”.
“With just $ 548 million in cash and cash equivalents on its balance sheet at the end of 1Q22, Beyond Meat’s cash balance could sustain its cash consumption for only 10 months after 1Q22. Raising additional capital to finance further consuming money would likely cost a lot and it would be bad news for existing and new shareholders. ‘
The company will release its latest quarterly report after market close on Thursday. Its latest report, released in May, showed a company struggling with stagnant revenues and a falling share price.
In that report, the company’s leaders acknowledged the decline in revenue and listed several issues that could further damage the business. These include new product launches, most notably 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 accompany public health measures in the future, in addition to inflation and supply chain setbacks.
Partnerships with McDonald’s, Taco Bell and KFC (seen above) failed as expected by the company