Beyond Meat Q2 2025 Earnings Report

Beyond Meat EPS Results

• Actual EPS: -$0.43
• Consensus EPS: -$0.37
• Beat/Miss: Missed by -$0.06
• One Year Ago EPS: -$0.53

Beyond Meat Revenue Results

• Actual Revenue: $74.96 million
• Expected Revenue: $85.71 million
• Beat/Miss: Missed by -$10.75 million
• YoY Revenue Growth: -19.50%

Beyond Meat Announcement Details

• Quarter: Q2 2025
• Date: 8/6/2025
• Time: After Market Closes
• Conference Call Date: Wednesday, August 6, 2025
• Conference Call Time: 5:00PM ET

Beyond Meat (NASDAQ:BYND), a plant-based meat company, develops, manufactures, markets, and sells plant-based meat products in the United States and internationally. The company sells a range of plant-based meat products across the platforms of beef, pork, and poultry. It sells its products through grocery, mass merchandiser, club stores, and natural retailer channels, as well as various food-away-from-home channels, including restaurants, foodservice outlets, and schools. The company was formerly known as Savage River, Inc. and changed its name to Beyond Meat, Inc. in September 2018. Beyond Meat, Inc. was incorporated in 2008 and is headquartered in El Segundo, California.

Beyond Meat Q2 2025 Earnings Call Transcript

Key Takeaways

• Negative Sentiment: Q2 net revenue dropped 19.6% YoY to $75 M, with gross margin slipping to 11.5% from 14.7%, driven by reduced volume and fixed-cost absorption headwinds.
• Positive Sentiment: Appointed interim Chief Transformation Officer and accelerated global expense reductions, portfolio optimization and facility investments to target EBITDA-positive operations by H2 2026.
• Neutral Sentiment: U.S. Retail channel was hurt by category softness, frozen-aisle relocations and delayed promotions, but consistent in-store brand blocks delivered higher velocity where maintained.
• Negative Sentiment: International Foodservice revenues declined 25.8% YoY, as lapping prior promotions, QSR menu pauses and lower burger volumes weighed on performance.
• Positive Sentiment: Refocused brand on the broader “Beyond” mark with new product tests like Beyond Ground and Beyond Steak, highlighting high protein, clean ingredients and opening new protein occasions.

Presentation

[Operator]

Thank you, everyone, and welcome to the Beyond Meat Inc. Twenty twenty five Second Quarter Conference Call.

[Operator]

At this time, all participants are Call. Please note today's call will be recorded. It is now my pleasure to turn today's conference over to Paul Shepherd, Vice President of FP and A and Investor Relations.

[Paul Sheppard, VP - Financial Planning & Analysis and Investor Relations at Beyond Meat]

Thank you. Hello, everyone, and thank you for your participation in today's call. Joining me are Ethan Brown, Founder, President and Chief Executive Officer and Luby Couture, Chief Financial Officer and Treasurer. By now, everyone should have access to our second quarter twenty twenty five earnings press release filed today after market close. This document is available in the Investor Relations section of Beyond Meat's website at www.beyondmeat.com.

[Paul Sheppard, VP - Financial Planning & Analysis and Investor Relations at Beyond Meat]

Before we begin, please note that all the information presented today is unaudited and that during the course of this call, management may make forward looking statements within the meaning of the federal securities laws. These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward looking statements. Forward looking statements in our earnings release, along with the comments on this call, are made only as of today and will not be updated as actual events unfold. We refer you to today's press release, our quarterly report on Form 10 Q for the quarter ended 06/28/2025 to be filed with the SEC and our annual report on Form 10 ks for the fiscal year ended 12/31/2024, along with other filings with the SEC for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward looking statements today. Please also note that on today's call, management may reference adjusted EBITDA, adjusted loss from operations and adjusted net loss, which are non GAAP financial measures.

[Paul Sheppard, VP - Financial Planning & Analysis and Investor Relations at Beyond Meat]

While we believe these non GAAP financial measures provide useful information for investors, any reference to this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Please refer to today's press release for a reconciliation of these non GAAP financial measures to their most comparable GAAP measures. And with that, I would now like to turn the call over to Ethan Brown.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

Thank you, Paul, and good afternoon, everyone. We are disappointed with our second quarter results, which reflect ongoing softness in the plant based meat category, particularly in The U. S. Retail channel and certain international foodservice segments. Before diving into details on the quarter, this level of disruption to a recovery requires broader commentary.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

Though we saw a return to top line growth in the 2024, the first two quarters of this year indicate the need for a fundamental reset for our branded category. To stabilize our business and with a goal to achieve EBITDA positive operations within the 2026 and to realize our much longer term objective of reshaping global protein markets in support of a healthier and more sustainable future. We are taking significant and immediate actions. Many of these, which I enumerate below, you will recognize as an acceleration of existing priorities. One, we are welcoming John Boken of Alex Partners as interim chief transformation officer to lead and support our enterprise wide transformation activities with a focus on operating expense reduction, gross margin expansion and broader operational efficiency.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

Two, we are intensifying expense reduction globally to fit our operating base into the existing near term opportunity. These measures include a reduction in force that we perform today. Before proceeding, I want to thank each of the impacted teammates and acknowledge their tremendous contributions to our company, mission and consumers. It is truly with heavy heart that we made these reductions and my deep appreciation and respect for these teammates and friends extends far beyond any comments I can make today. Three, we are deepening each of our gross margin expansion activities, including continuing to optimize our portfolio by exiting certain product lines and reconfiguring others, making additional investments in our facilities around core production lines and select others where we see opportunities to significantly reduce costs, working within our supply chain to reduce raw ingredient prices and logistic costs, and further fitting our production operations to current demand levels, so as to realize gross margin recovery even under lower volumes.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

Four, we are actively pursuing expanded distribution of our core products and expect to bring on new U. S. Retail distribution, including in the balance of this year. Five, going forward, we intend to increasingly use Beyond as the primary branded identifier. We have been formally using the shortened market in certain instances for some time now and believe it provides for reduced emphasis on facsimile, a now complicated frame that overshadows the real high quality protein offerings we provide to consumers and a widening of our aperture beyond animal protein replicates so that we have the freedom to, as and when appropriate to do so, meet broader consumer protein needs.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

Our limited test offering of Beyond Ground, our social channels last week represents early foray beyond beef, pork and poultry replication and has been met with considerable enthusiasm, albeit with a very narrow consumer set. In the coming months, we will provide additional details on our increased use of the brand mark beyond, which we implemented on a rolling basis. Six, we are continuing to intently focus on strengthening our balance sheet to address our 2027 convertible note maturity. With this high level context, a clear and comprehensive action plan in place, including especially appointed Interim Chief Transformation Officer, deeper operating expense reduction, increased focus on gross margin expansion across our core product lines the implementation of new U. S.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

Retail distribution for core product lines the kickoff of a rolling brand repositioning continued heightened focus on strengthening our balance sheet. I'll now turn to select details from our 2025. Net revenue for the quarter came in at $75,000,000 well below our expectations and down 20% versus the year ago period, a far cry from the recovery and renewed year over year growth we experienced in the second half of last year. The U. S.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

Retail channel represented a large share of the shortfall relative to expectations. I believe at least several factors are afoot. One, broadly remain a higher priced product than the animal protein equivalent, a feature that is particularly detrimental in a prolonged environment of tepid consumer spending. Two, it is clear that the negative narrative surrounding our category and brand is sufficiently ingrained to outlast initial efforts to dispel misinformation. Three, animal meats are in the true cyclical fashion of consumer trends, having a moment that currently leaves less room for our products and brand.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

With this macro context setting the stage, more specifically, we saw delays in anticipated new distribution and major promotions at certain large retailers throughout Q2 twenty twenty five. Further and related, we continue to experience the impact of dislocations arising from the move of our other plant based meat products at many retailers, refrigerated to the frozen aisle, negatively affecting our U. S. Retail performance this quarter. Certain delays in new U.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

S. Retail distribution meant that these aforementioned gaps played a larger role in our Q2 performance than anticipated. It is important to note that in stores where we have been able to maintain a consistent consolidated brand presence, we tend to see more encouraging velocity. This point is an important one to consider as we contemplate broader stabilization across U. S.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

Retail. Recall that this has been an enormously disruptive period for our category and brand across U. S. Grocery, With instability being the consistent theme for quite some time from multiple entrants flooding the market only to be listed to a general shrinking of shelf space to a disruptive relocation of the category from refrigerated to frozen aisle in certain large retailers. As we seek to rebuild our presence across this critically important channel, we are prioritizing consolidated offerings and high impact chains, so we might drive results that are similar to some of our higher performing current retailers.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

Turning now to International Foodservice, we lapped significant promotional activity in the year ago period and saw some pauses and discontinuation of our burger products in certain markets. These changes impact the level and mix of product volume, which in turn has implications for net revenue per pound and gross margin. We expect these and related impacts to continue to exert pressure in terms of year over year performance on our international foodservice channel for foreseeable quarters. Moving down the income statement, as one would expect, a 20% reduction in top line revenue exerts negative pressure on gross margin given the reduced volume slowing through our facilities, but the impact this has on fixed cost absorption COGS. This outcome was certainly the case in the 2025 and was further exacerbated by aforementioned and broader unfavorable product mix as we saw a higher percentage of sales in certain lower margin products.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

These factors coupled with higher trades than compared to the same year ago period and an accelerated depreciation charge equal to approximately 2.2 percentage points resulting from the suspension and substantial cessation of our China operations in the quarter obscured what is otherwise solid improvement on apples to apples production costs, a reflection of the vigorous nature of our ongoing manufacturing cost reduction initiatives. Overall, reflecting these factors, gross margin came in at 11.5% in the quarter, down from 14.7% a year ago.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

Operating expenses were $47,400,000 in the 2025 compared to $47,600,000 in the year ago period. Though this registers as only a slight improvement, it's important to note that OpEx this quarter included approximately $7,500,000 in expenses that we consider non recurring or non routine. Excluding these expenses one can see a meaningful reduction in operating expense both on a year over year and sequential basis.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

As the aforementioned reduction in force suggests in our recent entry into two separate agreements related to our campus headquarters building that reduce or offset a percentage of our future rent obligations. We are attacking this priority with vigor. Over an appropriate period of time, operating expenses should be squarely viewed in the category of controlling the controllables. We are confident in our ability to drive down routine enterprise wide expenses to better fit the current revenue opportunity. This disappointing quarter is now thankfully in the rearview mirror.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

And as you might have gathered, we're using it to deepen intensify our transformation towards sustainable EBITDA positive operations within the 2026. Stepping back again to a broader view, I will close with commentary on where we're headed. First and foremost, as has been the theme throughout my comments today, our 2025 requires a deeper and more fundamental reset for our company. You're seeing the thoroughness of this reset across the action items I emphasized, appointments and empowerment of the transformation industry veteran for purposes of accelerating our enterprise wide operating efficiency, including and specifically operating expense reduction and gross margin expansion, strategic push to build back core product distribution at certain high impact U. S.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

Retailers and in our increased use of beyond as a primary mark so as to open the brands aperture over time to protein opportunities that fall outside of beef, pork and poultry replication. The necessity of this reset does not however reduce or diminish our conviction or enthusiasm for the future that awaits. I want to be exceptionally clear on this point. We believe the factors that encumber our success today are transient. Just as we recognize that we are a higher priced item in a period of economic uncertainty and stress, we know that on a material basis, our cost structure will change as we achieve scale.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

We are in fact already in one limited but important instance producing and supplying product at a cost and price that is roughly equal to the corresponding animal protein equivalents. As we get to much higher volumes across our core products, the efficiency of our system will prevail and all other things being equal, we should be able to underprice animal protein in many offerings. And just as we acknowledge that our products are on the wrong side of a cultural moment, we know that the extreme nature of the current renaissance around animal protein will, as consumer trends do moderate. This moderation may occur solely with time, new information or new trends or may be stirred on by a set of related factors including pricing pressure, droughts and genetic disease outbreaks. Similarly, even as we continue to do what we can to counter misinformation around our products, including in the short nine minute film Planting Change available on YouTube, we believe that over time facts do have a way of overcoming fiction.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

Consumers do in fact bristle at being misled at the expense of their own health. And our products will have the opportunity to be more fairly evaluated for what they are. Looking immediately forward, we will continue to celebrate our brand and our products with a great tasting, healthful and sustainable addition they can make to the diet consumers throughout our markets. As the recently released and award winning Beyond Chicken Teases indicate with 21 grams of protein, no cholesterol and less than one gram of saturated fat sourced from avocado oil along with only 150 calories, We provide the consumer with strong macronutrients and ratios using simple and clean ingredients and we keep getting better at doing so. For example, our recently released Beyond Steak Delay product available only at select restaurants and steak houses provides 28 grams of protein, no cholesterol, and only one gram of saturated fat also from avocado oil, all with only two and thirty calories.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

And finally, a recently teased Beyond Ground original, which does not seek to replicate beef, pork or poultry is made with only four ingredients water, fava bean protein, potato protein and cilia moss and provides 27 grams of protein with no cholesterol, no saturated fat, no added oil and only 140 calories is in my view just the beginning. Our brand, our company, our expertise, our capability and our ethos are hardwired to deliver clean, great tasting, healthful protein made with simple, clean, limited ingredients, all within highly compelling macronutrient ratios. We took it on the chin in the 2025, but remain undeterred and truly excited about our future, the future of protein. And with that, I'll now turn the call over to Luby.

[Lubi Kutua, CFO & Treasurer at Beyond Meat]

Thank you, Ethan, and good afternoon, everyone. I'll begin by reviewing our financial results for the quarter in greater detail before providing some brief comments on our outlook. Overall, net revenues decreased 19.6% to $75,000,000 in the 2025 compared to $93,200,000 in the year ago period. The year over year decline in net revenues was primarily driven by an 18.9% decrease in volume of products sold and a 0.9% decrease in net revenue per pound. Volume of products sold continued to be negatively impacted by weak category demand and was further affected by reduced points of distribution in The U.

[Lubi Kutua, CFO & Treasurer at Beyond Meat]

S. Retail channel as well as lower sales of burger products to certain quick service restaurant customers in the international food service channel. The slight decrease in net revenue per pound was primarily driven by higher trade discounts and changes in product sales mix, partially offset by favorable changes in foreign currency exchange rates and the benefit from pricing actions initiated in the year ago period. Breaking this down by channel, U. S.

[Lubi Kutua, CFO & Treasurer at Beyond Meat]

Retail channel net revenues decreased 26.7% to $32,900,000 in the 2025 compared to $44,900,000 in the year ago period. The year over year decrease was primarily driven by a 24.2% decrease in volume of products sold and a 3.2% decrease in net revenue per pound. Weak category demand, particularly in the refrigerated segment, continued to weigh on our U. S. Retail volumes, which were further impacted by reduced points of distribution compared to the year ago period.

[Lubi Kutua, CFO & Treasurer at Beyond Meat]

Although we expect to regain some of this lost distribution in the balance of the year, we anticipate that operating conditions in our U. S. Retail business will nonetheless remain challenging in the near term. The year over year decrease in U. S.

[Lubi Kutua, CFO & Treasurer at Beyond Meat]

Retail net revenue per pound was primarily driven by higher trade discounts, partially offset by changes in product sales mix and the benefit from pricing actions implemented in 2024. U. S. Retail channel net revenues also included approximately $100,000 of ingredient sales in the quarter compared to approximately $800,000 in the year ago period. Moving on to U.

[Lubi Kutua, CFO & Treasurer at Beyond Meat]

S. Foodservice, net revenues increased 6.8% to $11,100,000 in the 2025 compared to $10,400,000 in the year ago period. The year over year increase in net revenues was primarily driven by a 4.4% increase in net revenue per pound and a 2.3% increase in volume of products sold, mainly reflecting higher sales of our ground beef and dinner sausage products broadly. Net revenue per pound primarily benefited from last year's pricing actions and changes in product sales mix, partially offset by higher trade discounts. Now turning to international.

[Lubi Kutua, CFO & Treasurer at Beyond Meat]

International retail channel net revenues decreased 9.8% to 15,900,000 in the 2025 compared to $17,600,000 in the year ago period. The decrease in net revenues was primarily driven by a 13.1% decrease in volume of products sold, partially offset by a 3.9% increase in net revenue per pound. The decrease in volume of products sold was primarily driven by reduced sales of our burger, dinner sausage and ground beef products in Canada, as well as lower sales of our burger products in The EU. Net revenue per pound in international retail primarily benefited from favorable changes in FX and changes in product sales mix. In international foodservice, net revenues in the 2025 decreased 25.8% to $15,100,000 compared to $20,400,000 in the year ago period.

[Lubi Kutua, CFO & Treasurer at Beyond Meat]

The decrease in net revenues was driven by a 21.6% decrease in volume of products sold, mainly attributable to lower sales of burger products to certain QSR customers and a 5.3% decrease in net revenue per pound, primarily driven by changes in product sales mix and partially offset by lower trade discounts and favorable changes in FX. Moving further down the P and L, gross profit in the 2025 was $8,600,000 or gross margin of 11.5% compared to gross profit of 13,700,000 or gross margin of 14.7% in the year ago period. Gross profit and gross margin in the 2025 were negatively impacted by the effect of reduced fixed cost absorption given the year over year decline in volume and to a lesser extent, a slight reduction in overall net revenue per pound. Additionally, gross profit and gross margin in Q2 included $1,700,000 in expenses related to the suspension of our operational activities in China, which have substantially ceased at this point. After taking into account certain transitory factors and the impact of softer volumes, we are encouraged by the direction of travel of our underlying manufacturing costs, even as we recognize that there's still significant work to be done to achieve our longer term objectives.

[Lubi Kutua, CFO & Treasurer at Beyond Meat]

Total operating expenses, including R and D, came in at $47,400,000 in the 2025 compared to $47,600,000 in the year ago period. This slight year over year improvement was achieved even as we incurred certain large non routine expenses in Q2, including 4,500,000 in expenses related to retention initiatives, dollars 2,500,000.0 in incremental legal expenses associated with arbitration proceedings arising from a contractual dispute with a former co manufacturer and approximately $500,000 in expenses related to the partial lease termination of a portion of our headquarters building in California. Excluding these items, the year over year decrease in operating expenses was primarily driven by reduced marketing and selling expenses. Below the line, total other income net was $5,700,000 in the 2025 compared to total other expense net of $600,000 increase in total other income net was primarily attributable to net realized and unrealized foreign currency transaction gains. All in, net loss for the 2025 was $33,200,000 or a loss of $0.43 per common share compared to net loss of $34,500,000 or net loss per common share of $0.53 in the year ago period.

[Lubi Kutua, CFO & Treasurer at Beyond Meat]

Adjusted EBITDA was a loss of $26,000,000 or minus 34.7% of net revenues in the 2025 compared to adjusted EBITDA loss of $23,000,000 or minus 24.7% of net revenues in the year ago period. With respect to balance sheet and cash flow highlights, our cash and cash equivalents balance, including restricted cash, was $117,300,000 and total outstanding debt was approximately $1,200,000,000 as of 06/28/2025. Net cash used in operating activities was $59,400,000 in the six months ended 06/28/2025, compared to $47,800,000 in the year ago period, while CapEx totaled $6,400,000 in the six months ended 06/28/2025, compared to $2,500,000 in the year ago period. Net cash provided by financing activities was $33,600,000 on the six months ended 06/28/2025, compared to net cash used of $1,000,000 in the year ago period. Net cash provided by financing activities in the six months ended 06/28/2025 included an initial draw in the amount of $40,000,000 from the delayed draw term loan facility with Unprocessed Foods LLC, partially offset by related debt issuance costs.

[Lubi Kutua, CFO & Treasurer at Beyond Meat]

With regard to cash usage during the quarter, it is worth noting that our total cash used in Q2 was negatively affected by certain non routine payments, including an amount related to the previously disclosed consumer class action settlement, legal and financial advisor costs as we seek to strengthen our balance sheet, and non routine retention costs to incentivize continuity across key functional areas. Net of these special items, our underlying cash consumption for the quarter was encouragingly lower than in recent quarters, but still a figure we are aggressively working to lower. Although we continue to have no near term debt maturities in line with our strategic priorities for the year, we continue to focus on strengthening our balance sheet, including evaluating potential transactions to address our existing convertible notes prior to maturity in 2027. I'll now touch briefly on our outlook. We continue to experience an elevated level of volatility and uncertainty in our operating environment, making it extremely difficult to forecast beyond a very short time horizon.

[Lubi Kutua, CFO & Treasurer at Beyond Meat]

As such, we are continuing to provide only limited guidance around our near term net revenue expectations. Specifically, in the 2025, we expect net revenues to be in the range of $68,000,000 to $73,000,000 reflecting, among other things, persistent softness of demand within the plant based meat category and the anticipated impact from recent distribution losses at certain QSR customers. And with that, I'll turn the call over to the operator to open it up for your questions. Thank you.

[Operator]

We'll take our first question from Ben Theurer with Barclays. Please go ahead. Your line is open.

[Benjamin Theurer, Managing Director at Barclays Corporate & Investment Bank]

Yes. Good afternoon, Ethan, Luby. Thanks for taking my questions. Two questions I have for you gentlemen. So number one, you talked about getting somewhat adjusted EBITDA positive at the back half of next year, if I understood this correctly.

[Benjamin Theurer, Managing Director at Barclays Corporate & Investment Bank]

So if I just look at somewhat the run rate operating expense that you're having right now, a little over, call it, 40 ish million. I just assume you get this down to a run rate more like in the low 30s. So that would still be an annualized somewhere in like the 120. So that's like kind of like your gross profit starting point, a little less on D and A adjusted. But in order to get there, it really feels like we need higher top line, right?

[Benjamin Theurer, Managing Director at Barclays Corporate & Investment Bank]

And I mean, you've given obviously outlook for the third quarter to be somewhat slightly down sequentially versus the second quarter, if we just assume low 70s versus the 75. So the question really is, aside from trying to get a gross margin back up to the 20s, close to 30s, you also need the revenues to be maybe closer to like $35,400 on an annualized basis, which just with call it 70 ish million each quarter doesn't work out. So what can you do to really scale up the top line while at the same time taking all this hit and trying to further cut on the SG and A side. So, the balance of here, that's what I would like to understand. What are the measures you're going to take to get one up and the other one down?

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

Great, I can take that and thanks for the question. Let me focus on U. S. Retail, just because I think that's where a lot of the issues that we are facing as well as a lot of the opportunity we have to react and make strong changes is available to us. Made a lot of comments around this in my prepared remarks, but if you look at kind of the reasons that we're experiencing that, it's overall category softness, but at the same time, you're seeing that our products provide something that the consumer is increasingly expressing high, high levels of interest, and that's very high levels of protein, and then protein that has the right ratio to things like saturated fat, things like cholesterol, and things like calories.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

So we fill that need in spades, right? We do it extremely well, right? But if you go on to the next thing, does it taste good, right? And then you look at things like Beyond Chicken or Beyond Steak and the reviews you see online, I don't need to kind of selectively feed those to you, people should go look, and they get really strong taste reviews, right? So there's something going on.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

We're fitting a consumer trend around high levels of protein against low levels of calories and saturated fat and things of that nature. The products by third party objective standards are being reviewed as tasting really good. So what's going on, right? And I think what you have are some of the broader issues that I mentioned. One is this misinformation around the products, right?

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

That is sticky. It's out there, it's been ingrained. And Bernie was interested in the kind of the actual health of our products. I think watching this planting chains video we did, which is about nine minutes on YouTube, really helps. But then the second piece outside of the misinformation is really around the pricing structure of our products, right?

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

We are just a higher priced product and it continues to be an issue in an environment where the consumer is cash strapped. If you look at, for example, our ground beef at, let's say, 9.99 a pound in an average retailer versus even as ground beef rises on the animal side, it's still let's say $7.99 a pound. That $2 matters, right? And so you've got the headwind of the misinformation. You've got the headwind of pricing.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

But over time, those things will start to change. You're starting to see more and more people come out, doctors, universities, national health organizations, say, wait, this stuff is really good for you. Make sure you're included in your diet. And then on pricing, as we continue to get our own house in order in terms of getting the production footprint where it needs to be scaling down to the current size that's required for current demand levels. I do hope that we can start to do something around pricing to maintain our margins, increase our margins, but be able to do so with more competitive pricing.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

And you're seeing us do that in certain value offerings Classic. We've got a six count coming out in the burger side that should be able to do that as well. So we can sort of chip away at these issues. But there's something more fundamental we can be doing at the Street level that really matters, and I think we'll start to show some dividends on the growth side. If you think about what's happened in U.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

S. Retail, we went from a beautiful selection of plant based meat in the fresh section of the supermarket refrigerated section a few years ago. Massive amounts of entrants came in, they came out, the misinformation, the pricing, all these things hurts the category, the category starts to become unsettled, then it starts to really devolve into a smattering of offerings in the refrigerated section. Then you see us getting pulled out of the refrigerated section and into the frozen section. That's happening in a really uncoordinated way.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

So we're finally now starting to get our bearings in the frozen section where we can build brand blocks. And where we have those brand blocks, you're starting to see much better velocities than you see where we don't have that. And so what our retail team is doing right now is they're going out and they're building these brand blocks in some of the key retailers. And we'll be announcing some distribution later this year that reflects that, but making it easier for the consumer to find our products is just basic blocking and tackling that we're doing. And anyone who's a loyal consumer of our brand knows it's hard to find our products, right?

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

And so building back that distribution, building back those brand blocks in key retailers is something we're very focused on around our core items, and that will start working to deliver some top line, we believe, at least stabilization. So if you look at the macro stuff, we're going to chip away at that. If you look at the sort of on the street stuff, we're working very hard to fix that. And those things should offer some stabilization. Time, we're starting to extend the brand beyond necessarily just animal protein replicates and into things that just deliver these nutritional gains that consumers want.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

And the most recent product we teased out around that was the Beyond Ground product. And that has 27 grams of protein, I mentioned it in my prepared remarks, won't repeat it here. But just the initial Ts we did online around that shows that we can capture this consumer interest around really good macros. Levels of protein, fiber, low levels of calories, low levels of saturated fat, zero cholesterol. And so you're gonna start seeing us do that, in a much more demonstrable way.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

And we think that also should lead to some significant top line growth.

[Benjamin Theurer, Managing Director at Barclays Corporate & Investment Bank]

Okay, got it. And then my second question really, you've kind of like managed to kind of like sustain the cash balance compared to March. So I was just wondering, I mean, obviously, we're still seeing negative cash and there was a little bit of like offsetting things on the financing side. Just, Luby, maybe you can help us bridge a little bit from the level where we're at right now, give or take a little over 100,000,000 a little bit maybe in restricted cash. How should we think about the cash and the working capital needs and everything that you're going to have to outlay for some of these like measures you're taking into the second half?

[Benjamin Theurer, Managing Director at Barclays Corporate & Investment Bank]

And how comfortable are you with the cash that you have also in light of the maturity in two years' time, give or take?

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

Yes. So very quickly before Luby jumps in, one of the things that I think is really important to note on the cash consumption this quarter is roughly half of it, fully about $19,000,000 is kind of cleaning up certain issues, whether it was the class action settlement or dealing with some of the structural issues we're trying to address on the balance sheet, right? So you have a lot of exogenous expense going on that's not related to the core business. So while it feels like a big number, the actual number we're trying to chop away at is much, much lower, and Louie can talk about that.

[Lubi Kutua, CFO & Treasurer at Beyond Meat]

Okay, Well, Ethan kind of stole my thought. Think what Ethan said is absolutely correct that, look, if you look at the obviously in the second quarter of this year, we did do our initial draw on the term delayed term loan facility and that was in the amount of $40,000,000 So if you exclude that, on the face of it, the level of cash consumption looks like it's ticked up on a sequential basis. But as Ethan mentioned, there are some things that were included in Q2, pretty significant amount related to things like this was the quarter where we paid the class action settlement that we had accrued for in 2024. I mentioned in my prepared remarks, some things we did around retention, we have right now financial and legal advisor fees related to some of our balance sheet strengthening work streams that we're pursuing and other items. It was a significant amount, but I think to get to really the heart of your question, are super focused on slowing the rate of cash burn.

[Lubi Kutua, CFO & Treasurer at Beyond Meat]

Asked the question before about in your comments about getting to EBITDA positive and how that requires top line. I think that's absolutely right. So, we need to not only stabilize the top line and eventually get that growing, but at the same time, some of the investments that we're making right now in our manufacturing facilities are really geared towards increasing the gross margin profile of the entire portfolio and taking much more aggressive measures to lower operating expenses. And so, we announced today the partnership with Alex Partners and bringing on John Bokin, that's really, I think, a symbol of the level of urgency and seriousness that we're placing on ensuring that we are able to drive out cost from the business as quickly as we can.

[Benjamin Theurer, Managing Director at Barclays Corporate & Investment Bank]

Got it. Thank you very much. I'll pass it on.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

Thank you.

[Operator]

We'll take our next question from Alexia Howard with Bernstein. Please go ahead. Your line is open.

[Alexia Howard, Research Analyst - US Foods at Sanford Bernstein]

Thank you. Just a couple of questions from me. First of all, the the international food service channels and the decline in the QSR chains, it seems as though that was an area of strength up until recently. Can you describe what's changed there and how that could be turned around once again?

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

Sure, sure. So I think it continues to be obviously a very important part of our business. We were lapping some promotional activity in the year ago period, so I think it's somewhat exaggerated because of that. But yes, there is a softening going on, and I think we look at it by market, and some markets are experiencing some macroeconomic conditions that are just making it difficult for our customers and customers by beating the restaurants we're serving in those regions. Others, there's shifting animal protein prices are dropping in certain areas, so they're putting things on the menu that allow them to have higher margin.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

So it's not one particular issue, but we continue to believe in those partnerships and continue to be active in our relationships with them. But this particular quarter, and I think for the next few quarters, I think you will see some softness in that area.

[Alexia Howard, Research Analyst - US Foods at Sanford Bernstein]

Thank you. And then just as a follow-up, I guess the question that I'm wrestling with in terms of turning top round, the top line around is how do you get a second bite at the cherry from people that have lapsed? Because obviously, there was a time few years ago where many people were trying the product, and they tried it again and again and again, and eventually, they just dropped off. And these are the flexitarian meat eaters. And now it I I think you mentioned in your prepared remarks, it's a much smaller group of consumers. Is there an issue, or how can you go about getting those folks back?

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

Look, it's a great question. And I want to just maybe also refer back to the previous question in that we're obviously doing everything we can to grow the top line. I think we will, I'm not overly exercised about that. But I look at this over a long period of time. What does the next decade look like?

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

So the number one job we have right now is really just to fit the operating base of the business into the current demand levels, right? So we need to stabilize the current revenue, and then make sure that the operating base fits within that. Once we've done that, then what we can do is sort of get through this period. I mean, it is, as I said, it's not the moment for plant based meat right now, right? You've got these cultural moments that occur, and we happen to be on the other side of the particular moment, right?

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

And that won't always be the case. But what we shouldn't do is sort of use a lot of dry powder trying to force growth right now. What we should be doing is stabilizing the business, getting the operating expense to where it needs to be, fixing the margins, so that as we can reach the audience that we need to reach, we're around to be able to do that. And that's really the key focus. Now having said that, I do believe that there are things we can be doing that are not kind of bet the farm activities on growing the top line, and that's some of the things I mentioned.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

We just continue to lean into the truth about our products. The fact that we do actually fit a very strong consumer trend, which is around protein and fiber, and it's particularly around how those two macronutrients are presented, and that's in the relation to lower calories, lower saturated fat, and things of that nature. We do that in spades. So we should be getting rewarded for that. And the reason we're not is some of these things we talked about, the misinformation, the higher pricing, so on and so forth.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

So when we have the opportunity to address that, we will. And we'll not only address it through kind of earned and social, do a little bit of paid on it as well. And as I mentioned before, trying to offer value packs to the consumer, things of that nature to get through on the pricing side. But how can we use our brand and our technology to serve that need for the consumer in a variety of applications? And so the Beyond Ground that we teased out, which is getting a really fascinating response online and a lot of interest from media, is an effort to emphasize those characteristics and attributes of our products versus emphasizing how much or how similar they are to animal protein.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

And so if you look at the Beyond Meat, with the 27 grams of protein, 140 calories, the fiber, etcetera, that's what the consumer is responding to today, and that's where you're going to see Beyond Meat leaning. And I think that will help us with some of the top line issues we're having.

[Alexia Howard, Research Analyst - US Foods at Sanford Bernstein]

Thank you very much. I'll pass it on.

[Operator]

We'll take our next question from Robert Moskow with TD Cowen. Please go ahead. Your line is open.

[Robert Moskow, Managing Director at TD Cowen]

Hi, thanks for the question. This is from the 10 ks, so it's kind of old. It's already been out there for a few months, but I was just looking at the employee count and it says seven fifty four employees. That's down from two years ago, but up a lot from 2023 when you had your first restructuring announcement. And I was wondering if the the net reduction that you were looking for in the November 2023 workforce reduction, did that materialize the way you expected?

[Robert Moskow, Managing Director at TD Cowen]

And, you know, is there, you know, was there an increase in employees in '24 after that? And the reason I'm asking is, you know, that everyone's hoping that you can shrink your cost base, it may sound kind of heartless, but in order to remain a going concern. So I wanted to ask that question.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

Look, it's a good question, and you might look at that and say, there's been creep, these guys are making these cuts, but they're just adding back. That's not what's happening. What's happening is, one, it's a change in composition of our workforce. So a lot of that is production related. And as you recall, we went from 13 co packers down to one.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

And so we have expanded kind of the activities we're doing in our facility. So that's what that looks It's not that our headquarters are chocked full of people. That's not the case.

[Lubi Kutua, CFO & Treasurer at Beyond Meat]

Just the other thing that I would the one other thing I would just add to that, Rob, is just over the last couple of years, we had invested in our international businesses as well, right. And so, the EU was expanding. We had a China business as well, right, which we're shutting down our operational activities there. That's some of what you're seeing in the time period that you're referring to.

[Robert Moskow, Managing Director at TD Cowen]

International expanded in 'twenty four?

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

That what you're saying? No, don't think, we will look at the exact numbers. I think he's referencing from '23 to today, but I think the primary issue that you're identifying is this Contract

[Robert Moskow, Managing Director at TD Cowen]

manufacturing, yeah.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

That makes Yeah, we would basically, you think about all that activity has been brought in house.

[Robert Moskow, Managing Director at TD Cowen]

Okay, my follow-up, John Bokken, can you give a little more detail about what he is going to focus on right out of the gate in order to improve efficiency and it's a temporary position. So what are his goals coming in and how long does he have to execute it?

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

Sure. So we've really enjoyed working with Alex Partners and working with John specifically. And this is kind of the next phase in our relationship. The reason that I wanted him to come on as an interim manager of the business is to really drive two major outcomes that we're looking for. One is to get the operational footprint into the current revenue environment, so that's the first.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

And so looking at how to do that thoughtfully in a way that doesn't break things but gets us to where we need to be. And he has a ton of experience doing that, right? And then the second is really around margin, is let's accelerate the margin work. We've had issues where we're making good progress on cost of goods produced, but you're not seeing that show up in margin as much as you should for a number of reasons. But one of the ones that's the most kind of frustrating, right, is that with lower volumes running through the facilities, you're having poor overhead absorption.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

And so that's obscuring the good progress we're making. So we just have to take a more holistic look at how we're driving margin expansion. So those two main initiatives are ones that are going be a major focus for them, but also just the operational efficiency of the business. What I have to do now, and this relates to Lexi's and some of the earlier comments, is how do we make sure that the terrific products that we're developing, amazing brand we have? And again, just take a moment to think about this.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

We've been through all this turmoil, but if you look at some major publications in The United States, 2024 I'm not talking about 2021, 2020, twenty nineteen twenty twenty four, you're seeing us identified as world's leading brand and so on and so forth. So we have a great brand. We have very good products. There is a disconnect going on. My job as CEO right now is to go out and work on that fundamental connection between our products and the consumer and make sure that that's happening.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

And so I wanted someone like John to take a kind of more global look at the business, come in and help us meet some of these, frankly, restructuring goals to make sure that we can become EBITDA positive within the second half of next year. So it's a pretty broadly skilled position. I can't comment on how much time he has. We're really enjoying him being here. So hopefully, we'll get some good work done together.

[Robert Moskow, Managing Director at TD Cowen]

Great, thank you.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

I got one more thing for you. What? You talk and I about the taste appeal of our products. There's a Yahoo! Piece that just ran today on our whole muscle steak, 28 grams of protein, one gram saturated fat, all these things made from mycelium, fava beans, it's a beautiful product.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

In it is a meat eater that is talking about, I guess his wife is talking about his reaction to this product. That's one I need you to try. You're gonna like that one.

[Robert Moskow, Managing Director at TD Cowen]

Okay, it will be done. Thank you, Ethan.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

Thank you, my man. Appreciate it.

[Operator]

And there are no further questions on the line at this time. I'll turn the program back to Ethan Brown for any closing remarks.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

Thank you. Look, guys, this is a tough quarter. As I said, we took it on the chin. It wasn't what we wanted. But I think the reaction is what matters.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

If you look at the transformation program work that I outlined, busy doing that. We've obviously known about the results and have been fast after it. I think between the intensified cost reduction, the gross margin expansion initiatives, really focusing on expanding our core distribution, particularly in U. S. Retail, and then this opportunity to potentially live outside some of the confines we've been in recently around looking at things like BeyondGround and the use of the Beyond brand and protein occasions for consumers.

[Ethan Brown, Founder, President, CEO & Board Member at Beyond Meat]

I'm very optimistic about where we're headed. And we've got to get this balance sheet stuff worked out. We're working on that. So making some fundamental changes and kind of a reset for where we are as a category leader, I think it's going to be hopefully a productive several years here. Thanks.

[Operator]

This does conclude the Beyond Meat Inc. Twenty twenty five second quarter Thank you again for your participation and you may now disconnect.

Participants

Executives

• Paul Sheppard, VP - Financial Planning & Analysis and Investor Relations
• Ethan Brown, Founder, President, CEO & Board Member
• Lubi Kutua, CFO & Treasurer

Analysts

• Benjamin Theurer, Managing Director at Barclays Corporate & Investment Bank
• Alexia Howard, Research Analyst - US Foods at Sanford Bernstein
• Robert Moskow, Managing Director at TD Cowen