Beyond Meat(US:BYND)2024-05-09 00:28Financial Data and Key Metrics Changes - Total net revenue for Q1 2024 was $75.6 million, an 18% decline from $92.2 million in Q1 2023, exceeding the guidance range of $70 million to $75 million [7][25] - Gross margin improved to 4.9%, up from the previous three quarters but down from 6.7% in Q1 2023 [7][28] - Operating expenses decreased to $57.1 million, down from $63.9 million year-over-year, contributing to a reduced loss from operations of $53.5 million compared to $57.7 million in the prior year [9][30] - Adjusted EBITDA loss was $32.9 million, the smallest loss since Q2 2021 [31] Business Line Data and Key Metrics Changes - U.S. retail and foodservice net revenues decreased by 16% and 16.2%, respectively, primarily due to a decrease in product volume sold [26] - International retail and foodservice channels saw net revenue declines of 12% and 28.7%, respectively, attributed to lapping previous large orders and softer demand in certain markets [26][27] Market Data and Key Metrics Changes - The decline in international retail was mainly due to the lapping of large initial orders for chicken innovations in Europe from the previous year [26] - The UK market experienced recessionary pressures affecting demand in both retail and foodservice channels [27] Company Strategy and Development Direction - The company is focused on five priorities for 2024, including operational efficiency, product innovation with the Beyond IV platform, pricing strategy adjustments, production network consolidation, and investment in European markets [11][18][20] - The launch of Beyond Burger IV and Beyond Beef IV is expected to enhance health benefits and improve market perception [12][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about margin improvement and operational efficiency, anticipating benefits from pricing changes and production consolidation throughout 2024 [8][23] - The company aims to restore margins to previous levels achieved in 2019 and 2020 over time [18] Other Important Information - Cash consumption decreased significantly to $32.5 million in Q1 2024 from $49 million in the same period in 2023 [10] - The company has a cash and cash equivalents balance of $173.5 million and total debt outstanding of $1.1 billion as of March 30, 2024 [31] Q&A Session All Questions and Answers Question: Confidence in sales outlook given pricing and volume changes - Management highlighted the rollout of the Beyond IV product and its expected positive reception, addressing health perception issues in the plant-based category [35][36] Question: Preliminary price elasticity with recent price increases - Management indicated it is too early to assess the impact of price increases on sales, but initial feedback has been positive [40][41] Question: International market performance and volume decline - Management noted that the decline was due to lapping previous strong sales and recessionary pressures in the UK and Canada [45][46] Question: Phasing of pricing and gross margins - Management expects significant benefits from pricing increases and operational efficiencies to improve gross margins in the second half of the year [49][50] Question: Customer and competitor reactions to price increases - Management reported that most retailers accepted the price increases, and competitors are also raising prices to drive profitability [61][63] Question: SKU rationalization status - Management confirmed ongoing SKU rationalization efforts, focusing on the Beyond IV platform while exiting less successful products [68][69] Question: Target consumer changes - Management emphasized that while health benefits are being highlighted, taste remains a priority, aiming to attract both health-conscious and taste-focused consumers [70][72]