Beyond Meat's stock is sizzling, up nearly 75% on growing gross margins

By Jon Swartz

Beyond Meat Inc.'s stock hurtled nearly 75% higher in after-hours trading Tuesday following the company's quarterly results that included a forecast of gross margins in the mid- to high-teens for 2024.

The beleaguered fake-meat maker (BYND), which had slogged through several brutal quarters, reported a fiscal fourth-quarter net loss of $155.1 million, or $2.40 a share, compared with a net loss of $66.9 million, or $1.05 a share, in the same quarter a year ago.

Net revenue declined to $73.7 million from $79.9 million in the year-ago quarter.

Analysts surveyed by FactSet had expected on average a net loss of 89 cents a share on revenue of $66.7 million.

The small cap company - with a market value: $480.8 million - provided fiscal 2024 sales guidance of $315 million to $345 million. FactSet analysts are forecasting $344.4 million.

In the company's earnings call, Chief Executive Ethan Brown laid out "major steps" to reorient Beyond Meat's trajectory over the next 12 to 18 months and return to growth, including "a steep reduction in our operating costs and cash use as we continue to implement lean management principles, the contraction of our production network to achieve quality and margin gains, and the implementation of pricing changes also in support of margin expansion."

Third Bridge analyst John Oh said the fourth-quarter results "demonstrate the encouraging steps" Beyond Meat is taking in "right-sizing their business to better fit the plant-based meat category as it stands today."

"Our experts [in the plant-based field] have told us that the company 'needs to get in survival mode' and that the cost savings initiatives and manufacturing optimization efforts are crucial for BYND given where the sector as a whole is currently," Oh said in an email.

After soaring more than 100% higher at one point during after-hours trading Tuesday, shares fell back to Earth a bit, closing up 74%. The stock has melted 58% over the past year, while the broader S&P 500 index SPX has advanced 28%.

-Jon Swartz

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02-27-24 2007ET

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