Beyond Meat (BYND) to Cut Workforce, Slashes 2022 Revenue View
Rising inflationary pressure has been a concern for several players in the food space. Beyond Meat, Inc. BYND is one such company bearing the brunt of rising costs. Keeping in mind, the ongoing headwinds including record inflation, the leading plant-based meat company unveiled that it is significantly reducing expenses, as part of which it is reducing workforce. Along with this, management reduced its 2022 revenue outlook.
Beyond Meat highlighted that it is cutting the present workforce by almost 200 employees, representing nearly 19% of its global workforce. At present, management projects one-time cash charges of roughly $4 million associated with the reduction in workforce. Management expects the reduction in force to be substantially completed by the end of 2022, subject to local law and consultation requirements. That said, the Zacks Rank #2 (Buy) company expects to generate operating savings of roughly $39 million in the next 12 months on cost reduction measures.
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For 2022, Beyond Meat expects net revenues in the range of $400-$425 million, reflecting a decline of almost 9-14% year over year. Earlier, the company’s had anticipated 2022 net revenues in the band of $470 million and $520 million. Considering the preliminary results, management expects third-quarter 2022 net revenues of nearly $82 million, down almost 23% from the year-ago quarter’s level.
Beyond Meat has been seeing the adverse impact of the ongoing softness in the plant-based meat category, mainly in the refrigerated sub-segment. Also, the impact of higher competition is a headwind. Notably, inflation has been putting pressure on the plant-based meat category as people trade down into less expensive forms of protein, like animal meat.
Decisions taken by distributors and customers, namely changes in inventory levels and postponed or canceled promotions, are affecting the company’s performance. Delayed and canceled product promotions, programs and introductions also dampened the company’s revenue outlook. Management envisions softness in the gross margin, thanks to the reduced revenue outlook.
Beyond Meat’s stock has slumped 67.3% in the past six months compared with the industry’s 26.6% decline.
3 Solid Food Bets
Some other top-ranked stocks are Lancaster Colony LANC, Hershey HSY and The J. M. Smucker SJM.
Lancaster Colony, which manufactures and markets food products for the retail and foodservice markets, currently sports a Zacks Rank of 1 (Strong Buy). LANC delivered an earnings surprise of 170% in the last reported quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Lancaster Colony’s current financial year sales and EPS suggests growth of 9.6% and 38.3%, respectively, from the corresponding year-ago reported figures.
Hershey, the largest chocolate manufacturer in North America as well as a global leader in chocolate and non-chocolate confectionery, presently has a Zacks Rank #2 (Buy). HSY pulled off a trailing four-quarter earnings surprise of 8.7%, on average.
The Zacks Consensus Estimate for Hershey’s sales and EPS for the current financial year suggests respective growth of 13.9% and 14.4% from the year-ago reported figures.
J. M. Smucker, which manufactures and markets branded food and beverage products, carries a Zacks Rank #2. J. M. Smucker delivered a trailing four-quarter earnings surprise of 20.8%, on average.
The Zacks Consensus Estimate for SJM’s current financial year sales suggests growth of 4.4% from the year-ago period’s reported figure.
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