BEYOND MEAT, INC. Q1 FY2025 earnings call

• Ethan Brown discussed distribution issues where certain retailers moved products to frozen aisles, expecting to regain distribution later. Production network consolidation efforts, including Devault, Pennsylvania facility, but Q1 results didn't reflect full benefits due to lower sales volumes, product mix change, startup delays, and large inventory provision. - Operating expenses were $55.1 million, a $2 million year-over-year reduction, but included $7 million in transient expenses like legal arbitration, inventory provisions, and China suspension. - Marketing initiatives: Launch of 'Real People, Real Results' campaign to dispel misinformation and show health benefits of plant-based diet. - Financing: Closed $100 million senior secured debt facility from Unprocessed Foods LLC for additional liquidity. - Lubi Kutua detailed financial results by channel, gross margin impact of lower volumes and mix, and balance sheet highlights including cash and debt levels.

In the first quarter of 2025, net revenues decreased 9.1% to $68.7 million compared to $75.6 million in the year-ago period. The decrease in net revenues was primarily due to an 11.2% decrease in volume of products sold, partially offset by a 2.4% increase in net revenue per pound. By channel: U.S. retail channel net revenues decreased 15.4% to $31.4 million, driven by a 23.2% volume decrease. U.S. food service net revenues decreased 23.5% to $9.4 million. International retail net revenues increased 0.8% to $12.7 million, while international food service net revenues increased 12.1% to $15.3 million. Gross profit in Q1 2025 was a loss of $1.1 million (negative 1.5% margin) compared to gross profit of $3.7 million (4.9% margin) in the year-ago period. Gross profit and margin included extraordinary charges related to inventory reduction and China operations suspension.

Lubi Kutua withdrew previous full-year guidance and limited revised outlook to Q2 net revenue expectations. Specifically, expects Q2 2025 net revenues to be in the range of $80 million to $85 million, reflecting ongoing category softness and consumer sector challenges.

• Macro-economic uncertainties and reduced consumer confidence negatively impacting category demand. - Loss of distribution as retailers moved products to frozen aisles. - Temporary supply disruptions during production ramp-up at Devault facility. - Extraordinary charges related to inventory provisions and legal arbitration. - Suspension of operational activities in China with ongoing impact on costs and operations.

Q: Ben Theurer asked about potential initiatives to boost US market volume and details on $100 million financing.

A: Ethan Brown mentioned restoring distribution and using 'Real People, Real Results' campaign to clear misinformation. Lubi Kutua detailed financing terms including interest rates and maturities.

Q: Peter Saleh inquired about building out US food service team.

A: Lubi Kutua said the team is fully built out and expects improvement, focusing on smaller national accounts.

Q: Robert Moskow asked about SG&A run rate and one-time expenses.

A: Lubi Kutua discussed normalization of legal expenses and ongoing impact from China suspension.

Q: Kaumil Gajrawala asked about de-stocking and one-time items.

A: Lubi Kutua noted general consumer slowdown impact and ongoing depreciation related to China suspension