Beyond Meat on Wednesday reported better-than-expected sales in the second quarter despite continuing weak demand for its plant-based burgers, chicken and other products.
The El Segundo, California-based company said its revenue fell nearly 9% to $93.2 million for the April-June period. That was better than the $87.8 million Wall Street anticipated, according to analysts polled by FactSet.
Still, it was Beyond Meat’s ninth straight quarter of year-over-year revenue declines as it continues to fight consumer perceptions that its products are overly processed, unhealthy or just not tasty. Beyond Meat said its sales volumes fell 14% in the April-June period on weaker retail and food-service demand in the U.S. and international markets.
Beyond Meat has been trying to boost demand with new, healthier products. Earlier this spring, the company introduced Beyond Burger patties and Beyond Beef grounds with 60% less saturated fat than the previous products. A healthier sausage, made with avocado oil, followed in June.
And last month, it debuted Beyond Sun Sausage, a product filled with bell peppers, spinach, lentils and other vegetables and fruits. Unlike previous products, Beyond Meat said the new sausage isn’t intended to replicate meat, but to be a healthier protein option.
Beyond Meat President and CEO Ethan Brown said consumers and retailers have been reacting positively to the new formulations.
“The main thing that destabilized this category has been the misperception around health,” Brown said Wednesday during a conference call with investors. “We are hammering away at the single most important issue, in our view, that is required to get the entire category going again.”
Brown said Beyond Meat is also making progress on streamlining its manufacturing and holding down costs. The company’s second quarter gross margin of 14.7% was the highest since the third quarter of 2021.
Beyond Meat is trying to rely less on discounting, and it did raise U.S. prices during the quarter as its new products hit the market, Brown said. But the company didn’t see much pushback from grocers, some of whom increased their orders for its products.
“We think that is evidence the product is doing well and the message is resonating,” Brown said.
But analysts on the conference call still questioned how the company will bring back customers who may have tried its previous products but didn’t like them. Brown said changing perceptions will take a while, but this time around, Beyond Meat has the backing of many doctors, dieticians and nutritionists who are praising the health benefits of the reformulated products.
“We don’t need everybody to like the product. We need enough people to like it, and that’s a very large addressable market,” Brown said.
Beyond Meat narrowed its net loss to $34.4 million, or 53 cents per share, from $53.5 million a year ago. That was in line with analysts’ forecasts.
The company also revised its full-year revenue forecast Wednesday. It now expects revenue in the $320 million to $340 million range. Previously it had forecast full-year revenue between $315 million and $345 million.
Beyond Meat stock, which has fallen 66% in the past 12 months, was up about 1.5% in after-market trading after the earnings report.