Beyond Meat (NASDAQ:BYND) provided a profit warning for the third quarter and full year in a release of select Q3 results on Thursday, with sales weaker than expected during the quarter.
The company also revealed it is cutting 19% of its global, non-production workforce as it looks to reduce expenses, with an expected return to growth failing to occur.
The struggling plant-based food business now expects Q3 Gross profit to be a loss of approximately $7 million to $8 million, with revenue at around $75 million, below consensus expectations. Free cash flow for Q3 is seen at roughly $7.6 million.
The company's Q3 revenue was impacted by weaker-than-expected sales volumes in U.S. retail and U.S. food service channels, reflecting ongoing and further demand softness in the plant-based meat category. In addition, BYND noted that there was lower than anticipated promotional effectiveness and unfavorable changes in the product sales mix.
"We anticipated a modest return to growth in the third quarter of 2023 that did not occur, reflecting further sector-specific and consumer headwinds. Even as we implement measures to address those headwinds that are within our sphere of influence, we intend to pursue a further, sizable reduction of operating expenses to improve our cost structure," said Beyond Meat President and CEO Ethan Brown.
As well as the workforce reduction, BYND said it will pursue other actions to improve its cost structure and overall operating performance. These include reviewing its pricing strategy to support gross margin expansion, continuing to utilize inventory management to reduce working capital, intensifying focus on channels and geographies that are exhibiting revenue growth, and for U.S. retail, using its portfolio and marketing to "directly counter misinformation about our products and category."
For the full year, the company said net revenues are now seen between $330 million to $340 million, a decrease of around 21% to 19% compared to 2022. BYND's gross profit for the full year is now expected to be roughly breakeven.
Beyond Meat shares are up over 7% at the time of writing after initially dropping immediately after the update. It is currently trading around the $6.34 mark.