BEYOND MEAT, INC. Q3 FY2025 earnings call

• Balance Sheet Reset: Completed a debt exchange and ATM program, reducing debt by ~$900 million, resetting the balance sheet with plans to further reduce debt.
• Q3 Performance Review: Net revenue at $70.2M, gross margin at 10.3%, operating expenses included $77.4M in non-cash impairment charges.
• Operational Initiatives:
  • Misinformation Addressal: Highlighting product health benefits via new products (Beyond Ground, Beyond Steak) and platforms like Beyond Test Kitchen.
  • Distribution Rebuild: Rebuilding U.S. retail distribution, consolidating brands in frozen sections, and focusing U.S. foodservice on health-focused establishments.
  • Cost Reduction: Using transformation office to reduce operating expenses, enlisting AlixPartners for restructuring, and pursuing RFP work for supply chain savings.
  • Margin Expansion: Exiting unprofitable product lines, investing in facilities, and optimizing supply chain.
  • Strategic Initiatives: Considering broader initiatives to accelerate growth beyond current turnaround efforts.

Total net revenues for the third quarter of 2025 were $70.2 million, a 13.3% decline year-over-year. U.S. Retail net revenues decreased 18.4% to $28.5 million, driven by a 12.6% volume decline and 6.6% price decrease. U.S. Foodservice net revenues dropped 27.3% to $10.5 million due to a 27.1% volume decrease. International Retail net revenues fell 4.6% to $15.8 million, with a 12.5% volume decline partially offset by a 9.1% price increase. International Foodservice net revenues increased 2.3% to $15.3 million, driven by a 4.4% volume increase but offset by price mix changes. Gross margin was 10.3% in Q3 2025, down from 17.7% in the prior year, impacted by lower volume, China-related charges, and higher trade discounts.

• Fourth Quarter 2025: Expect net revenues to be in the range of $60 million to $65 million, reflecting ongoing demand weakness in the plant-based meat category and distribution losses at certain QSR customers.

• Macroeconomic Softness: Global softness in the plant-based meat category impacting sales and margins.
• Misinformation: Persistent misinformation affecting consumer perception of plant-based products.
• Balance Sheet Execution: Uncertainties in fully executing balance sheet initiatives and achieving expected cost savings.

Q: Ethan, you talked about returning to a gross profit margin of 30% plus. What's currently holding back margins?

A: Lower top line, mix of lower-margin products, higher material costs, and charges like China depreciation. However, ongoing initiatives like continuous production lines and RFP work are expected to improve margins in the coming quarters.

Q: Lubi, can you reconcile the cash balance post-financing?

A: The ATM program raised ~$148.7 million, and the debt exchange reduced debt, but specific current cash balance details aren't quantifiable at this point as transaction fees and ongoing cash consumption factors are involved.