BEYOND MEAT, INC. Q4 FY2024 earnings call

Management Statement and Operational Highlights:

• 2024 was a key transition year with two consecutive quarters of year-over-year net revenue growth in the second half. Launched new products like Beyond IV, Sun Sausage, and extended Beyond Steak platform, with accreditations from relevant organizations.
• Achieved nearly $100 million year-over-year improvement in adjusted EBITDA by reducing expenses and improving net revenues and gross margin. Full year 2024 COGS per pound was lower, but net revenue per pound was affected by sales mix, price increase pace, and exchange rates.
• Fourth quarter saw net revenues increase 4%, gross margin at 13.1%, and operating expenses reduced significantly. Globally, had positive momentum in some markets like France.
• 2025 strategic priorities: Deliver comparable net revenues, improve gross margin to ~20% with aim to exceed 30% long-term, further reduce operating expenses over 2025 - 2026, and strengthen balance sheet.

Segment Performance:

• Fourth Quarter 2024: Net revenues were $76.7 million, a 4% year-over-year increase. Gross margin was 13.1%. U.S. retail net revenues increased 5.7% to $33.9 million, with net revenue per pound up but volume down 4.5%. U.S. foodservice net revenues decreased 2.1% to $10.5 million. International retail net revenues decreased 1.7% to $13.1 million, while international foodservice net revenues increased 9.2% to $19.3 million.
• Full Year 2024: Net revenues were $326.5 million, down 4.9% vs 2023 but with growth in the last two quarters. Gross margin was 12.8%. COGS per pound in 2024 was $4.07, $0.40 lower than 2023, and Q4 COGS per pound was $3.91, the best since Q2 2021.

Guidance:

• Full year 2025 net revenues expected in range of $320 million to $335 million, gross margin ~20%, operating expenses $160 million to $180 million, capital expenditures $15 million to $20 million.
• First quarter 2025 net revenues expected to be roughly comparable to Q1 2024.
• Goal to achieve run rate EBITDA positive operations by year end 2026.

Risks:

• Consumer confusion regarding product value proposition.
• Industry competitors' misleading information.
• Unfavorable foreign currency exchange rates.
• Uncertainties in production network consolidation.
• Impact of suspending operational activities in China.

Q: Ben Theurer asked about consumer perception market dynamics and China suspension of operations.

A: Ethan Brown said in U.S. retail, providing clean simple products is working with favorable elasticity, and guidance conservatism is to focus on EBITDA positive goal.

Q: Kaumil Gajrawala asked about core consumer.

A: Ethan Brown said core consumer is health-oriented, with strong interest despite noise, and category will fulfill promise.

Q: Ken Goldman asked about 2025 gross margin outlook.

A: Ethan Brown and Lubi Kutua said it's due to stabilized production, incremental investments, price increases, and network consolidation.

Q: Robert Moskow asked about first quarter forecast and distribution.

A: Ethan Brown said first quarter conservative due to network consolidation and distribution changes, but positive trends continue. Lubi Kutua talked about expanding presence in stores.

Q: Alexia Howard asked about price points and market growth.

A: Ethan Brown said hit price parity target in some products, Europe has growth pockets, and focus on simple clean product message.

Q: Peter Saleh asked about consumer health认知 and long-term gross margin.

A: Ethan Brown talked about health message and importance of truth, Lubi Kutua said achieving gross margin goal involves top line growth, gross margin expansion, and operating expense reduction