Beyond Meat (BYND) is set to report its fiscal fourth-quarter and full year 2022 earnings results after market close on Thursday.
Wall Street is gearing up to hear the results after a rocky year from the plant-based protein giant, with shares down 69% compared to a year ago. Analysts will be tuning in to understand if U.S. consumers are still favoring cheaper proteins like chicken, over plant-based proteins, the status of partnerships with fast food giants like KFC and McDonald’s, in addition to how the company plans to grow following consecutive quarterly earnings losses.
Per Bloomberg consensus estimates, Wall Street expects Beyond Meat to report revenue of $75.7 million, along with a loss on adjusted earnings per share of -$1.18.
Currently, there are no Buys, 9 Holds, and 9 Sells on shares of Beyond Meat.
Demand for the plant-based category is in focus after reports of fizzling interest.
Mizuho analyst John Baumgartner said investors best stay on the sidelines for this stock as consumers trade-down for cheaper proteins. “In 2023, lingering macro pressures and consumer value-seeking should again limit growth potential for the U.S. meat alternatives category.”
Following last quarterly results, Baumgartner told Yahoo Finance there were lots of unanswered questions about the strength of the plant-based category, leaving its growth story “really up in the air right now.”
As Beyond Meat looks to make a comeback, Mizuho, who has Neutral rating and price target of $11 on the stock, is looking to recent management and staffing changes.
At the end of October, Beyond Meat announced plans to reduce expenses and target cash flow operations within the second half of 2023, which coincided with the announcement of a 19% cut in its workforce.
A month ago, the company hired Akerho “AK” Oghoghomeh from Red Bull to lead global marketing efforts.
Baumgartner said innovation, “which has been very costly” with “limited benefit” to sales growth, is in focus for him and other analysts.
Peter Saleh of BTIG, who has a Neutral rating on shares, said investors should look out for non-recurring revenue that came in this time last year from products tests at McDonald’s (MCD) and KFC (YUM) that have since been discontinued. He anticipates it will cause “meaningful impact on revenue.”
“We estimate that Beyond Meat’s sales should be pressured by roughly $10 million-$15 million in the fourth quarter and early first quarter 2023 as they lap the McPlant test and national launch of Beyond Chicken at KFC,” Saleh said in a note.
From these limited-time tests, he anticipates sales to be dragged by “at least” high-single digits last quarter.
Back in September of 2021, McDonald’s announced its plan to test its first ever plant-based burger. The McPlant was the first offering in its strategic three-year partnership, which is now days away from its two-year anniversary. This week, McDonald’s unveiled plant-based McPlant Nuggets in Germany.
Beyond Jerky could also pressure sales, per Saleh, as “much of the sales generated in 1H22 was a result of channel fill and trial.”
Saleh added, “We are cautiously optimistic that Beyond can achieve a cash-neutral position by late this year through a focus on core, profitable products, points of distribution, and geographies. We estimate the company has enough cash to sustain itself for the balance of this year, but beyond that will depend on achieving their targeted cash flow positive position.”
Right now, Beyond Meat is offered at Kroger (KR), Walmart (WMT), Publix Super Markets, Costco (COST), Whole Foods (AMZN) and Target (TGT).
Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at email@example.com.
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