Beyond Meat Warns Of “material” Impairment In Blow To Share Price

Credit: BalkansCat / Shutterstock.com

More gloom is successful nan pipeline for Beyond Meat arsenic nan alternative-protein business warned of an upcoming “material” impairment charge.

The informing came successful nan shape of a filing pinch nan US Securities and Exchange Commission (SEC) connected Friday (24 October) up of California-based Beyond Meat’s last third-quarter results announcement connected 4 November.

Discover B2B Marketing That Performs

Combine business intelligence and editorial excellence to scope engaged professionals crossed 36 starring media platforms.

Find retired much

“Although nan impairment complaint is expected to beryllium material, nan institution is not yet capable to reasonably quantify nan magnitude astatine this time”, nan filing read, adding that nan non-cash impairment “related to definite of its long-lived assets”.

Nasdaq-listed Beyond Meat, which has seen a important dilution of its stock value since nan September announcement, and past completion of, a debt-for-equity swap, explained: “The company’s recoverability test, conducted successful accordance pinch ASC 360, preliminarily indicated that nan carrying magnitude of definite of its long-lived assets was not recoverable from nan projected undiscounted early rate flows of nan applicable plus group.”

Beyond Meats’ shares were down 23% astatine $2.185 arsenic of nan extremity of US trading connected Friday, ending a rally that was reportedly sparked by nan closing of bets connected further declines successful nan banal price, alleged short-covering.

The shares had fallen beneath $1.00 earlier successful October, flouting Nasdaq listing rules if levels beneath that level were to beryllium maintained. Despite nan short-lived rally, nan shares are still down astir 42% this year.

Meanwhile, Beyond Meat is projecting third-quarter income gross of astir $70m, wrong nan $68-$73m scope forecast astatine nan second-quarter results shape successful August.

However, nan fig for nan 3 months to 27 September, which is preliminary, would correspond a alteration from nan $81m posted for nan aforesaid 4th of past year, erstwhile group income roseate 7.6%.

Gross margins are besides group for different decline, projected by Beyond Meat connected Friday to beryllium astir 10-11% for nan 3rd quarter. The separator was 17.7% successful nan corresponding period, a betterment from nan minus 9.6% successful 2023.

An impairment would beryllium different stumbling artifact for Beyond Meat.

John Boken astatine consultancy AlixPartners was hired successful August arsenic an outer advisor, described arsenic an executive pinch “corporate turnaround and restructuring experience”.

Beyond Meat has not reported a nett profit since nan business went nationalist successful 2019, though nary estimates were provided connected Friday for that metric.

Along pinch nan repeated losses and falling revenues, nan institution has antecedently announced an exit from China, occupation cuts and outer financing.

Earlier this year, nan institution revealed it had secured a $100m financing package from Unprocessed Foods, a portion of nan non-profit Ahimsa Foundation, pinch an action to return a number liking successful Beyond Meat.

Volumes dropped crossed each nan group’s income channels successful nan first six months of fiscal 2025, astir notably successful US retail, while Beyond Meat reported yet different bottom-line nett nonaccomplishment – $82.2m successful nan first half.

On Friday, Beyond Meat said nan expected gross separator figures would see astir $1.7m of expenses connected pinch its exit from China. Otherwise, nan separator will apt beryllium astir 12-13%.

Responding to Friday’s SEC filing, John Baumgartner, a managing head astatine Mizuho Securities, wrote: “Fundamentals will apt stay pressured arsenic animal nutrient depletion is progressively on-trend; request is proving resilient contempt grounds prices.

“Cost savings are apt to support EBITDA but absent a income inflection, we expect continued FCF [free rate flow] pain and absence of catalysts to ain shares.”

Baumgartner continued successful his investigation note: “In addition, today’s disclosure of an unquantified but ‘material’ forthcoming impairment complaint reflects much subdued soul expectations for nan retired years.”