Beyond Meat, Inc. Common Stock 2026 Q2 Earnings Call

Hello, everyone, and thank you for participating in today's call. Joining me are Ethan Brown, Founder, President, and Chief Executive Officer, and Lubi Kutua, Chief Financial Officer and Treasurer. By now, everyone should have access to our second quarter 2026 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. Before we begin, please note 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 June 27th, 2026, to be filed with the SEC, our annual report on Form 10-K for the fiscal year ended December 31st, 2025, filed with the SEC, 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 made today. Please 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. 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. With that, I'd now like to turn the call over to Ethan Brown.

Thank you, Paul, and good afternoon, everyone. I'll start with our second quarter results, then turn to how we are executing our turnaround across three pillars. Beginning with net revenues, we came in at $68.8 million, roughly $4 million above the high end of our $60 million-$65 million guidance range. This figure headlines a quarter of sequential progress, even if it is slower than we would like. Specifically, net revenues were down 8.2% year-over-year, an improvement from year-over-year declines of 15.3% in Q1 2026 and 19.7% in Q4 2025. Gross margin tells a similar story at 8.5%, roughly five and six points better than Q1 2026 and Q4 2025 respectively. Importantly, this is the last quarter to carry the drag of accelerated depreciation tied to cessation of our China operations, a weight equal to more than two points of margin this quarter.

Operating expenses of $36.7 million represented a 15% sequential decline and a 19% decline year-over-year, while EBITDA of negative $27.7 million is a slight improvement over the first quarter of 2026. Reduced cash use was a more pronounced improvement, which excluding financing activities, fell to approximately $18 million, a 44% reduction or $14 million less than cash used in the year-ago period. All in a quarter of positive momentum with substantial ground still to cover. Before diving into our forward path, I'll now give some additional detail around select components of our results, starting with net revenues. Our core plant-based meat business continues to face pressure in U.S. retail and food service and in global food service consistent with category trends. However, this pressure was partially offset by strong growth in Europe and Canada, where retail was up by double digits in both markets year-over-year respectively.

In the U.S., we are seeing some signs of stabilization in certain pockets of U.S. retail with our core burger, ground beef, and dinner sausage products demonstrating resiliency in specific, though certainly not all accounts. We are hopeful that these positive signs endure and strengthen, but are also acutely aware that misinformation regarding the health of our products continues to impact our retail and food service businesses in the United States. As I've often shared over the years, we've responded to this misinformation by further leaning into the health of our portfolio, raising the bar on its nutritional profile while working extensively with health institutions, physicians, nutritionists, and universities. That work has earned recognition from the American Heart Association and American Diabetes Association, among others, and is buttressed by clinical trials by leading researchers as well as consumer case studies.

These efforts notwithstanding, we still operate in a world where clean protein from fava beans grown by farmers in the rich soils of North Dakota and Montana, blended with heart healthy avocado oil, has been in the main tarnished by incumbent industry funded campaigns. To this end, we are increasingly addressing the source of this information in our efforts to educate consumers. Most recently, our Don't Believe the Cropaganda campaign was named by Ad Age as one of the top five creative ads to know about right now and voted a top five campaign in the publication's best campaign of the month reader poll. This upper funnel education work is being done simultaneously with targeted lower funnel activities, including shopper marketing programs at leading retailers that clearly emphasize what our products actually offer. Strong macronutrient content and ratios, clean ingredient decks, and compelling taste.

Turning now to operations, as we move past many of the drags of elevated operating expenses and higher cost inventory, the underlying strength of our operations is beginning to emerge as we see strong execution across our global production network and a notable sequential reduction in cost of goods sold. The quarter's margin reflects early returns from some of this execution. First, we consolidated a production network and are finishing trials on our new continuous line at our Columbia, Missouri facility, absorbing volume that had previously been outsourced and improving conversion costs year-over-year. Second, we reduced certain material costs through contract renegotiation with further savings in progress through RFPs, secondary sourcing, and formulation adjustments. Third, we consolidated warehouses, lowered logistics expense, and exited less profitable product lines.

As in prior quarters, the benefit of these programs was muted by lower volume and the resulting under absorption of overhead, a persistent overhang we are aiming to address through a combination of growth programs and facilities planning. Finally, as noted at the onset, operating expenses continue to fall, and while benefiting from certain non-routine items, mainly reflect the impact of ongoing focus on SG&A and transformation work required to position the business for sustainable operations. Moving from the quarter's results to our path forward, I'll now focus my comments around three pillars intended to deliver the enterprise to sustainable growth. These are, one, invest in growth in Europe and Canada, while continuing to work to stabilize our core U.S. business. Two, complete our evolution from a narrow focus on plant-based meat to a broader focus on nutrition as Beyond the plant protein company.

Three, drive operational efficiency and unit economic improvement. I'll now turn to the first pillar. Europe and Canada present our clearest near term growth engines for our core product lines, and we are investing behind them accordingly. In Europe, we are cautiously encouraged by markets such as Germany and the U.K. As well as performance therein, while in Canada, continue to enjoy strong retail distribution. In both markets, we plan to invest behind this growth, as well as bring innovation to the consumer. Here in the U.S., in addition to the upper and lower funnel marketing campaigns that I discussed earlier, we continue to bring new center-of-the-plate protein to market as we seek to stabilize U.S. net revenues. Beyond Steak Filet made its retail debut this quarter.

Since launching on a direct-to-consumer platform, Beyond Test Kitchen, in late 2025, it's become one of our best-selling items online, with strong consumer reviews for taste, texture, and nutrition. It delivers 28 grams of plant protein, three grams of fiber, and one gram of saturated fat per serving from avocado oil, and is one of more than 20 products in our portfolio to earn Clean Label Project certification. We believe it is one of our most compelling center-of-the-plate innovations since the Beyond Burger. It launched at Wegmans and H-E-B in July, followed by Meijer, and we expect additional retailers to come. We are also building stronger brand blocks in frozen retail with existing products. Beyond Chicken Pieces Spicy Buffalo rolled out to more than 2,000 Kroger stores nationwide. 21 grams of plant protein, half a gram of saturated fat, no cholesterol, and 130 calories.