BEYOND MEAT, INC. Q2 FY2025 earnings call

Management Statement and Operational Highlights

• Company Outlook: Disappointed with Q2 results due to soft plant-based meat category, particularly U.S. retail and international foodservice.
• Transformation Actions:
  • Appointed John Boken as Interim Chief Transformation Officer to lead enterprise-wide transformation, focusing on expense reduction, gross margin expansion, and efficiency.
  • Implemented workforce reduction, with appreciation for impacted employees.
  • Intensified gross margin expansion efforts, including portfolio optimization, facility investments, supply chain cost reduction, and fitting production to demand.
  • Pursuing expanded distribution of core products in U.S. retail, with new distribution expected later in 2025.
  • Increasing use of "Beyond" as primary brand to widen focus beyond animal protein replicates and meet broader consumer protein needs, exemplified by Beyond Ground product.
  • Focus on strengthening balance sheet to address 2027 convertible note maturity.

Segment Performance

• Net Revenues: Decreased 19.6% to $75 million in Q2 2025 compared to $93.2 million in Q2 2024.
  • U.S. Retail: Net revenues decreased 26.7% to $32.9 million, impacted by weak category demand and reduced distribution.
  • U.S. Foodservice: Net revenues increased 6.8% to $11.1 million, driven by higher net revenue per pound and volume.
  • International Retail: Net revenues decreased 9.8% to $15.9 million, due to lower volume partially offset by higher net revenue per pound.
  • International Foodservice: Net revenues decreased 25.8% to $15.1 million, affected by lower volume and product mix.
• Gross Margin: 11.5% in Q2 2025 vs. 14.7% in Q2 2024, impacted by reduced volume and product mix.
• Operating Expenses: $47.4 million in Q2 2025 vs. $47.6 million in Q2 2024, with nonrecurring expenses included.
• Net Loss: $33.2 million or $0.43 per share in Q2 2025 vs. $34.5 million or $0.53 per share in Q2 2024.

Guidance

• Third Quarter 2025: Expect net revenues in the range of $68 million to $73 million, reflecting persistent softness in plant-based meat category and distribution losses at certain QSR customers.

Risks

• Category Softness: Ongoing softness in plant-based meat category, particularly in U.S. retail and international foodservice, impacting revenues and margins.
• Misinformation: Negative narrative around the category and brand that is ingrained, affecting consumer perception.
• Pricing Pressure: Higher-priced products compared to animal protein equivalents, challenging in economic uncertainty.
• Operational Challenges: Disruptions in distribution (e.g., relocation to frozen aisle), supply chain issues, and production inefficiencies affecting gross margin and expenses.

Question and Answer

• Q: Ben Theurer on scaling top line and EBITDA positive goal A: Focus on U.S. retail distribution, building brand blocks in key retailers, chipping away at misinformation and pricing issues, and expanding beyond animal protein replicates with products like Beyond Ground.
• Q: Alexia Howard on international foodservice decline A: Softening due to lapped promotions, macroeconomic conditions, and animal protein price drops in certain areas; continuing relationships but expecting softness in next few quarters.
• Q: Robert Moskow on workforce and John Boken's role A: Workforce changes due to in-house contract manufacturing shift; John Boken to focus on aligning operational footprint with revenue and accelerating margin expansion, with a goal to achieve EBITDA positive by second half of 2026.