Shares of Beyond Meat skyrocketed in after-hours trading on Tuesday after the company promised to cut costs and transition to a “leaner operating structure” in its fourth-quarter financial report.
The troubled plant-based meat company, which has partnerships with McDonald’s and KFC owner Yum! Brands, has faced falling demand for its products and ballooning costs in recent years. But on Tuesday, the company announced a turnaround plan.
“Our 2024 plan includes taking steps to steeply reduce operating expense and cash use,” Beyond Meat CEO Ethan Brown said in a statement.
Overall, Beyond Meat reported a 7.8% decrease in year-over-year net revenues to $73.7 million, beating Wall Street’s expectations for the quarter, according to Factset.
The report sent shares of Beyond Meat surging. The stock was up more than 70% in after-hours trading on Tuesday after falling more than 60% in the past year.
On a Tuesday call with Beyond Meat’s investors, Brown outlined a set of initiatives intended to rightsize the struggling company.
Brown said the company would cut at least $70 million from Beyond Meat’s operating budget in 2024. As part of those cuts, Brown said, Beyond Meat would “tighten” its focus and trim some of its offerings, discontinuing its Beyond Meat jerky line.
Brown said the discontinuation would allow the company to put its resources toward other products “which we believe have higher profitable growth potential.”
Beyond Meat did not specify whether it may conduct layoffs as part of its cost-cutting measures.
Brown also pushed back on concerns about the healthiness of Beyond Meat’s plant-based alternative meat, saying the company is “proud of the health benefits available through our current products.”
Still, the company touted its planned rollout of “Beyond IV” in 2024, a new version of its product that the company claims will deliver “superior health benefits and taste.”
Beyond’s products have faced criticism for relatively high prices. Brown announced that the company had conducted an “extensive pricing analysis” and is prepared to implement product pricing changes.
”We believe these sweeping changes, together with measures we plan to pursue this year to bolster our balance sheet, will strengthen our near-term operations as we pursue our vision of being the global protein company of the future,” the company said in a statement.
The company also reported its full-year 2023 financial results Tuesday, reporting a net loss of $338.1 million for the year.
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