Beyond Meat (BYND) 10 May 232023 Q1 Earnings call transcript

Hello, and welcome to Beyond Meat's 2023 First Quarter Conference Call. [Operator Instructions] Note, this event is being recorded.

I would now like to turn the conference over to Paul Shepherd [ph], Vice President, FP&A and Investor Relations. Please go ahead.

Thank you. welcome. and afternoon, Good

to today's today. Officer; Ethan Meat's Chief and By the after section have and on earnings Relations quarter and release Investor document press Financial Founder, at is Chief website Treasurer. filed access should everyone Executive Lou market now, Beyond company's call me www.beyondmeat.com. first Brown, XXXX closed are the President Officer the This Joining of by in Cato, available

presented within differ please today course securities begin, forward-looking that that of based note current and cause are during management the information on results the statements in unaudited. we these from the uncertainties expectations is could actual Before beliefs of may materially all And described make statements. the federal call, those involve this and These and to management's forward-looking laws. statements meaning risks

not to financial management made Form statements any ended on that may materially events for the XXXX, detailed call, the today in in the of the today is results Please SEC could from statements Form call, on on and comments quarterly earnings discussion that implied December for those Forward-looking this today. annual EBITDA, or forward-looking of company's fiscal will XX-K differ a reference updated the April ended was which other also earnings year actual quarter non-GAAP today's cause a and XXXX, expressed the for that today's XX, filings with made measure. only the on filed you adjusted note risks report to as with company's We report refer along be as are XX-Q release, release, X, and the unfold. actual

the not for press provides to for believe useful we a as information information of adjusted is EBITDA with GAAP. to considered reference any for today's comparable presented release financial to refer its to Please a accordance be in this measure. substitute information financial or in most measure investors, isolation intended non-GAAP GAAP While reconciliation this

to call like now would I turn that, to Ethan Brown. over with the And

Paul, progress you, and amidst pleased I'm everyone. our demonstrate strategy solid results plan. Thank afternoon, first and quarter good our that

we flow These prioritize As across will X reduction being use our of we OpEx full with emphasis of pillars beef, you value that XXXX. Two, the would a of operating cash from poultry to streams model, valuable the and most goal focus a a upon in pivot accretive focus of appropriately and year force overall versus percent which will pork profit we margin. delivers cash activities we management to on growth execute on platforms. support laser the positive sustainable on central lean and near-term flow this near-term would dollars we opportunities streamline the are: half And maximizing one, within trial expansion balancing consumer opportunities. place tenets outlined apply long-term margin inventory adoption, second an growth three, and recall, and through one our of support growth would our

my X to comments deployment the focused QX reference lean of performance margin of each to of structure pillars: of by body the summarizing management is on these operations. cost cost begin and will I and company The expansion process our out our reduction. one, in drive

generate but that tangible resources. lifting heavy network, we have our and our progress. rationalize production Though to collapsing do, and we optimizing unnecessary consolidating cost continue co-packing while processes are We eliminating steps to seeing much

and the margin improvement supply continues a XXXX inflation as from logistic chains as in back solid from cross basis, recently more into COGS in pound negative XX% generally, For over to we per to manufacturing example, reduced swift positive year-over-year XXXX. on by QX us on trough approximately excluding gross depreciation. margin plague QX even This costs, XX% as allowed primarily of of impact of any production a

operating Alongside overall out existing our per cost price parity. changes to on million investments. imply focus our margin X% cost our taking for sequential average total animal mix for of continue reduction these sweating need programs team business even in expenses, continues approximately $XX broadly, point; price to we reducing gains new of this X% year-over-year. intense versus operations a on the quarter, reduction basis The are to XX% down, as OpEx down protein. More free is up combined cash. reduction to QX long-standing the down impact in will target inventory restoration XX% from At We well as pound and basis, on are year-over-year reduction we consistent raising a a cash reflecting through on two, with high a this for parity and year-over-year achieving of million pricing both a of bringing with we focus pursue path as in $XX.X margin drawdown assets, prices basis; levels million our our use deliberate as price XXXX on $XX.X of is steep total

has The or the partners. basis. As prioritization be of draw We're these efficient down inventory previously X, down levels. inventory though cash team a material select with with the balance working process the and of in and inventory levels business with down $XX nearly demand calendar the will strategic raw and current sequential long-term levels, across curve across of linear our network, X% inventories year, generating implement near-term growth our to to the million excess opportunities levels on not continues downward noted, as plan in the necessarily

even specific long-term growth valuable partnerships. and taking we most action opportunities our restoration nurture of continue near-term to are as to We encourage

to our comments are near-term focus U.S. U.S. Retail grocery in the impact my actions, we regard approaches Here, with chosen on similar I've using food though to on service. given segment's growth,

a as that rolling marketing with program main odd gains pricing the approach retail around them. with is foodie our make offerings better activation back through to be Two, consumer growth game a One, consumers we we retail of straight to a the a partners This record highlights most and and our seek products to narrow and products reengage as health. portfolio. campaigns our taste we continue elasticities plant-based gap test with from we point around there how we of in-store actions animal of we themes the important comparisons that we within between are introduce Three, refrigerated part our four, the grocery, and as our further the taste [ph], to setting sustainable focused clean features the category. what consumer confusion and broad remains certain to of bringing our actions: products where digital the implement were are messaging while we key or plan critical on marketing, In U.S. renovations health strategy and year-over-year our evaluate the restoring we continues our to to to strategic benefits great working face to summer, challenging celebrating make protein; X we ground largest out process. engagement promotional

season. key We noise, as are a consumers select these of goal amid toward intensifying programs to with for implementation renovation collaboration marketing of substantial broader parity and into grilling strategic our pricing retailers, designed X we head peak tactic each educate tactics,

key for year-over-year X the More a the the Retail, despite category area brand expand meat and quickly up for to in product. SKU continue at we In frozen generally, a continues distribution and units, frozen for growth customer, both be our to sequential dollars significantly. has the stake retail plant-based launch, its the set in risen recent frozen and U.S. number on to

Year-over-year, the in when XX according to category, ending QX XX.X% March XXXX. frozen XXXX. Specifically, Peru and XX.X% Beyond XX.X% units units for and weeks XX, Meat Omni Spins [ph] during dollars same XX.X% the dollars grew QX data the XXXX comparing the period

EU Moving on retail. to

in We We draws portfolio are innovation on expertise team. the localized our the and expanding that our product of global resources EU.

we select the found These Beyond and file Heijn U.K., products. Beyond In The Europe, plant-based Beyond be Berger, portfolio Meat available In U.K., can products Chicken beyond Bonnet select and the range stores. the beyond Sainsbury Yumbo complement at Yancich, at Waitrose Albert the and Burger, in a tenders Beyond includes which and nuggets mints new and existing of Beyond Sausage, stores Berger, base. In beyond the Netherlands are chicken rolled nuggets Chicken out the Beyond Netherlands, beyond nationwide. and

Turning option receiving. also as agree would nugget offered throughout Germany, happy long-term pleasure to meal with are to press Germany. the is encouraged latter a the it plant Europe, are which McPlant year-over-year strategic the Burger Nuggets in across platform opportunities; plant and we of partners contributing the our XXX% and McDonald's of plant I've while by are growth certainly positive Both Germany, success I enjoying success McDonald's our at the had of seeing the foodservice. in international various very is the in the

so collaboration and the tirelessly the immensely offered team from of I'm product our Moreover, for global all to worked this bring and forward, the proud with Portugal. making members Germany of is I'm Austria, Netherlands, who grateful consumer to and it menu also that possible. McDonald's partnership burger the and continues plant Ireland, limited EU and a in remains in U.K., a item the time for the resonate permanent but succeed being

McDonald's McPlant a on continues basis. to Austria, and rotating Steakhouse the limited tie at items offer burger McPlant Additionally, Fresh in Burger

over net across QX permanent Turning the in Salvador, to all revenues El at given itself Singapore, summary, Guatemala menu is remain and In Yum! XXXX, which XX% U.K., of in products QX of less the rose seasonality. Canada, typical items business, XXXX noteworthy restaurants Our Sweden. and segments

basis, U.S. year-ago jump This by on XXXX, relative Though increase sequential a the we increases challenging Beyond revenues the a international and retail driven expectation into However, of revenues, year-over-year with service growth by retail move Meat and the past quarterly Foodservice back and half in a in to more sequential international return of bolstered year-ago encouraging a metric comparison of growth our same year. QX's the on XX% saw total food and a U.S. net revenues exceeded net net growth modest sequential X.X%. which focus was is basis the increase in quarter-over-quarter. progress as XX%

longer-term now near-term our to from to turn like the I in actions on would check enduring strategy.

belief to elements, maintained, our our cross the to profile of and chasm and on: driving broader the that way we focusing health by the is today. of taste and three, a products We'll can adopters sensory of price these where underprice two, the health consumer articulating and structure the cost match of balance relentlessly in of will consumers the then platforms; it one, our for resonates point As each comments benefits from focus to early our mainstream much on over I've animal my we faced protein. that crossover advancing

advance well as of sensory to taste continue profile of as offerings. the our award-winning distribution products We and expand

retail of the tests. to launching that positive in will contain pleased are convincing burger our in particularly in frozen announce of from Both with and am I profile, offerings we beat section. service advances notes time generation long around receiving summer, Century food be This strong animal-like new a platform flavor. making, reviews delivery early in customer very serum-like A a we get the neutral and

that crossover products to the benefits element great Moving continue the is provide second of The develop important strategy, on-state a health health, example. to our consumer. to

was from the Lab, in by joining being program, has As saturated good a heart-healthy on the Nutrition Heart plant-based More the nutritionist-approved convenience been announced housekeeping and to and of low nutritional check as on taste, number first same, is American the meat recognition the certified stake has Association's simplicity, transparency. foods including sodium. as the exacting Ambelon on requirements, American that good Heart select yesterday, based specific ranks criteria [ph] well accesses earn to meet and stake housekeeping which institutes, Association's the of received this foods the fats distinguished nutrition Heart

very proud to such at years worked families. I'm of Beyond bring and a hard-working powerful, and members again, consumers positive Here team to Meat purposeful the all for innovation

Heart beyond advance cancer research American meeting of our Cancer Stanford Association, research Medicine, X-year for stake the Society plant-based with agreement our X-year with of program certification University Within on to diet of School initiative the plant-based prevention. American the the

empirical the and are of element be production the strategy toward been noise in clear life, XX months of to today, parity important helping an our we of the that animal of third the perhaps underlying system. in clearest under committed price data economy aggressive is our what we to interjected protein to everyday our strategy where parts of understand with the consumers crossover time should quoting focused we has and benefits on marching last It reduction. price. further various our But In -- economic XX substantial line plant-based cost sight of remains consumer norm, meat facts into pressure price some remain highly our taking have

continue with consumers the between to that their strong pricing with as remains explore percentage animal health a certain We It needs. is of delicious insights clearly or as protein time-limited our narrow access conviction animal will below consumer providing benefits programs by to $X.X passed understood our at we Accordingly, can meat the behavior meats price and to trillion plant-based global provide we equivalent. progress meaningful a allows, products that of that industry. point gap

In back an look in full emphasis positive closing, a flow our operations growth operating model we this cash the the as of half transition quarter second on second year. towards on with of achieving sustainable

many even by as have encouraged to we results, are early left We miles travel.

and growth long-term managing streams portfolio, across look driving initiatives inventory expansion cash efficiency, plant, beef, and as continue through much advance higher support of steady-state as next implementation valuable and value set partners I push you inventory of we narrow we near-term the to for returning pork efficiency more OpEx progress. working most and We poultry quarter lean toward our forward levels by opportunities. to margin pursuing to to even the share our a

our With walk the financial quarter Lubi as to first that, us our outlook I'll results detail as in of through it balance over greater year. for to the turn well

Ethan. Thanks,

strongest however, trends reflect representing to recognize, weakness category success quarter increase Though executing QX reflect the as demand our work QX much net our our top XX% as challenging progress broader relative sequential drove the of percentage to amid demonstrate line early to continue the quarter a we operating continued $XX.X year-over-year XXXX. navigate declined that is first environment. million XX% there to increase is Our We in results having still results first to to macroeconomic against We revenues since absolute and continue sequential our and QX, headwinds. plan. team do

lower-priced meat, year QX from last continues consumers. driven a in muted outlook of discuss that from a for strong backdrop among have and our Beyond jerky subcategory With revenues see recent year. topic to business, the I'll lap sequential in this experience particularly than expect shift increase strong foodservice more results Meat of animal core our U.S. comparison more Within return in to we this significant and balance sell-in our a challenges the refrigerated years towards plant-based pressures momentarily inflationary difficult to QX to that this we as QX year I of protein past. when included

rate the X.X% in offset the per Turning estimated a of decrease first X.X% revenues net primarily volume first equipment. note, to product included the foreign a for gross approximately was in to manufacturing sales gross pound pound drivers and impact of ago year lesser pricing the associated our exchange and of discounts with increased Gross net profit changes attributable partially decreased accounting million quarter per year-over-year net sold mix, in and million declined or quarter revenue or performance; revenue higher trade $X.X certain extent, lives net -- Of X.X% and by profit from products revenue net unfavorable impact, X.X% to the margin products. XXXX our in change compared estimate of large the useful to of $X.X revenues of was period. in

the of and we quarter the uniform of that useful margin $X.X our during of XX lives large of The utilizing equipment further years R&D useful increase a practices X.X useful lives more and reflect to to a XXXX, current of by service an in manufacturing depreciation certain X cost to first the context, For completed determined and million our appropriate from reduced in periods. or gross resulting a to reassessment quarter approximately of depreciation equipment range expense percentage relative change previous was the lives. equipment estimate estimated years points operating expense XX in

the of for However, only expense $X.XX the in accounted change pound, when depreciation inclusive $X.XX roughly year-over-year profit per considering in estimate, gross increase. of accounting aforementioned the improvement

drivers a approximately reduced pound per of of logistics per pound, the were combined contributed profit in manufacturing and cost The improvement benefit $X.XX. gross primary which year-over-year

and by lower per factors revenue However, partially net inventory offset increased pound. reserves these were

lower Turning to including down reflecting and $XX.X first OpEx driven in reduced was expenses OpEx; rightsizing year-over-year decrease XXXX million our focus quarter trial related expenses lower in nonproduction on costs of in of operating approximately headcount XX% million, advertising, base. on The expenses. included by sales XXXX decreased expense marketing primarily the expenses, ongoing production were expenses $X.X outbound year-over-year our expenses, losses and freight to first Of expenses included selling note, of our SG&A in fixed assets. the certain noncash quarter in

in a million we the net the currency Moving foreign to activity economic ago increase ago by interest TPP offset further compared joint primarily increase the year saw venture, gains limited and our reflecting period, a $X.X from period. in loss million partially in P&L, unconsolidated at transaction down income $X.X year

Overall, loss EBITDA first net year loss loss the minus the million $XX.X share net year of of an $XXX.X period. XX.X% of $XX.X the share common revenues of was net or per of first or the of $X.XX in net million in EBITDA XX.X% to of ago common revenues million XXXX per $X.XX million adjusted loss was, therefore, ago quarter a in XXXX quarter compared net Adjusted compared $XX or loss minus of period. or a in to

to and our flow balance turning Now highlights. sheet cash

total X, million, $XX.X Our was was XXXX. outstanding equivalents cash $XXX.X $X.X April of reduction cash fell as Inventory to a debt quarter. approximately to and billion restricted $XXX.X the previous million, cash compared balance, and of including million

a registration such we may registration you which our facility used filed be establishing today, a balance statement will common million at-the-market stock. have for bolster statement, seen, our we earlier Under shelf $XXX universal As are sheet. to

the quarter to activities $X.X sale flows; investing the from was QX in compared Capital XXXX from million the $XXX $XX.X million of proceeds cash in period. decrease to cash in the activities million million operating year our also totaled flows period. first joint million net used partially assets. venture, or ago year included Cash to in compared investments of fixed in $X.X $X.X expenditures Turning by in ago offset of $XX.X related to million XXXX

provide our commentary about now outlook. XXXX me Let some

from call. Our on last provided we our largely the guidance earnings unchanged remains targets

X% of continue a year XXXX. be range million, to the the million to year XX% For approximately XXXX, to in expect we decrease the $XXX to net of $XXX full full to revenues representing compared

expect sequentially and relative increase consideration For mentioned headwinds of QX outlook relative earlier, the facilities issues expectations. impact at third-party second into tough as This to to roughly revenues XX% higher category incrementally presumed our we year. net QX quarter, takes to year-ago this some warehousing from supply temporary chain comparisons previous

be gross expected our points X half margin of change of accounting second year. in prior distribution expansion full Chicken is expect as for X beyond a distributed implies for including and for contribution slightly revenue to estimate respect Beyond margin, evenly comparisons. XXXX, contributions new growth beyond of to full of the With and in Chicken expansion be double expect year-ago halves the beyond be of to acceleration the towards and which launched recently to relatively for higher we second digits percentage revenue stake, nuggets, driven from chicken year, in weighting by the first Overall, Popcorn a above and the distribution fillet, first weaker half. result with products international cycling low products in the in continued we guidance markets U.S., gross depreciation, This to an the now the

year. to remainder increase still the is through the margin of Gross sequentially expected

the full previous of the $XX million expect approximately year slightly half $XX to We year remains and $XXX our towards heavily XXXX, million more estimate operating the front the CapEx to for unchanged. be continue year to million weighted total of expenses for full

the target within continue positive the to achievement free We of second of half XXXX. cash flow

certain Finally, related intend and Beyond the continued Meat provide assume will process believe vehicle TPP. TPP to XXXX, for quarter operating for activities and contracts will in business starting move remain Meat responsibilities our we of to Turkey we the potential Turkey, let for Beyond me margin expansion. we future plant-based XXXX, to range In of a of update a overall quick the quarter the restructuring distribution on of evaluate which support objectives development. fourth products of gross a first

you. my over conclude it up questions. I'll that, the remarks open back to for turn call to the and With operator your Thank

very you Thank much.

question begin first session. now the Today's from Bernstein. Howard will Alexia question-and-answer Instructions] [Operator with We comes

half gave to I main Where you half you able the Can sort and I positive -- guess the -- good of of some But given category second previously levers cash levers higher are second to year to in return prepared that I ideas down that those? question the year. ask about are of are. prioritize the flow is the of big the you in you biggest is the where pretty coming the the that said remarks. of got of back expected the get some pricing headwinds I than in you've think know

Sure. you. Thank

we revenue levers, to up you as course, of ourselves net cash and So cash a position flow guide positive have from and, freeing inventory. ourselves into OpEx know, X margin, really into lot

just optimizing combination And of heavily freeing factors, up obviously it's on into the very of we lean going cash so inventory. to those question a are

inventory We environment. have significant amount demand current to of a relative

We're swinging on where what margin to able that we're systemic starting a see kind we into stronger our to you back gross starting to use look position is business as the let's with in through negative quarter are get some of quarter of the third to more focused quarter-over-quarter a positive at can relative business that appropriate source a that much XX%, you current accomplish, market. to and shocks also went cash. into for the at of subside, improvement. were, So that this much we're we very going were if And say,

inventory confident that in in out flow cash goal to positive So to that that get we this to cash and year. get of second accelerate feel of the we'll fact, continue half

we're some piece I quarters that we've there'll and flow business I as cash direction. quarters adding the take positive information orient cash want we flow also is in trajectory; operations. But that around governed cost time, cash think achieving caution people I a principle, regard, away decision-making business to not where right? that by continue then be the where sustaining main the in that to want on some organized continuing of and that to but Our we're overall over Now is we're confident

So if well we get the working into problem attack expense. as some also we through situation a where of levers thought, we'll as aren't operating the

with The next Adam question from comes Goldman Sachs. Samuelson

evening, Yes. Thank you. everyone. Good

Is on then one I specific quarter to half So actually Olivia, $XXX on pursue I route And X of we're intention positive that you specifically alluded to I clear measuring this point would of the or actually possibly that? cash positive cash in operations. I you put mean, kind just a could total, aim the and financing in I time that operations is be guess that flow questions. do the that elaborate capital think a in just maybe cash the to how you saying frame maybe second in the to that to much the equity prepared in finer to you the just second for at-the-market do kind like facility. want goal. hear coming remarks, million what raising on of the are half flow year, year. think kind kind of over back flow expect point on of of you decision cumulatively

Yes.

the and the timing positive. elaborate flow tackle can cash on we I'll first the one then So of

wanted put that out ATM, there. it's we to something the on So

the are, confident We again, the of very business is in making. progression

where growth the is think We're and sustainable week-over-week. I making story toward considerable business creating storing progress one model. a

cash So signal the needing it's in we're that a no way immediately.

we it are we're and it's I out going think reserves We'll question going cash a use opportunistically. put our lingering to appropriate. think as what there But just do. there a was conditions to really bolster So we're about it in the as result, because it

we answer. we be are going to when this and about thoughtful so And use very provides an and judicious But it. how

Ethan. Thanks, Yes.

positive. around What said being is the question on targeting And flow we've half. so positive flow guidance we're Adam, second within regarding your the cash cash

quarters, can or X And so that both QX mean either and quarter. QX

that within. doing be performance range, around would, tight of was to and in fourth we're making quarter. some love stronger and right? that that so of what third margin the Now already of quarter we we've sure we expenses mentioned to very within gross to both able Ethan everything the operating But that we sort can course, manage And mark hit a the levers said drive

think we so operating So operations the able the flow, is should again, you we've is cash free be do flow flow cash to we just objective CapEx. to And second positive it that within defined remind half. it way from less cash

The next question Dickerson comes from Rob with Jefferies.

you the innovation think that of by now forthcoming that that at others. within that, of that through would higher just the gives product some. now kind say XX innovation clearly been like kind past feel of development kind over and a are Kind obviously, it's pipeline has consumer you have changes innovation penetration let's to back compressed, itself is through than you the that And half, to seen you, some but Clearly, we've speaking looks you're fairly then household material look household right, the and broad question household in that months? just through penetration. that, think pulled of elevated kind right, like headwinds, and around there Great. drop player, dropped relative you more say, inherent in better the as driven we largest COVID the conviction you're back And it decent category given the penetration kind reaction on then to of if of

question. Great it. appreciate I No,

been, has that. reduction. like to right. like So from think, or I you're There something XX.X% XX.X%

One, look at look that the on inflationary some trading recent really you the of a environment animal at occurring. meat there, obviously earnings that moderation to But bit macro front. there's little also down if X us that's continue providers, of that We this hope so in of and issue gives they're seeing ways. seeing

some is So sure. for still that at play we of believe

products. our ambiguity, around an is, induced level Second of is the I of think, benefits there health

that the And figure a and very think some that. and of the new is brand-specific it out group of where really I through new out somewhat some is a tremendous issues doing stand And entrants category, trying of to number and just came what's we people category, became what. enough interest genuine campaigns that consumer, products, third, don't did into crowded landscape and purposely to ceded confusing the for

Now decision more that's much taking I left approachable shakes the out, some rational set a is the itself care of category and grocery. consumer think as went of with and in

kind factors those household but main we to the that shared. felt would -- that you penetration the X contribute of are So just numbers

Now get things into the first, and frozen from innovation want we're at renovation positive about do the bit And up shows units side, on the XX% beyond doing that's and innovation. side. dollars a some But the little of that we where look obviously power and pause to also on I'll the and it about of year-over-year. base, a XX% up saw I category smaller but

When in very the launch new I quickly, like product, distribution life example, my with mentioned think a steak, I major number as retailer. we short X a Beyond very rose comments, that for position in

it's that's is around do, consuming very at of that. reviews, ambiguity on think American of endorsement, to a endorsement in very at AHA, all I created now that an equivalent piece that right? we've XX% we'll the a yesterday's responding so really real stake earning and animal good And is Curios the terrific Association, can health, is is see announcement easy something to And the protein And associated fat terms indulgent animal by progress from the delicious, people now right? kind certification of from product about think Heart look feel if you So something I So the than continue to with selective, thing right? than holobin, now center-of-the-plate typically is less it saturated a has protein protein that protein etcetera. the eating of which not source

health question not raised, we're largely responding being out of our incumbent products around So this putting through the through by the but marketing efforts, only that's players think, our products. benefits I to

both consumer. with then innovation reengage renovation we're the message as we're bringing becomes the So market really as to starts to health inflation and up clear, moderate the that set to

talk little the bit renovations. a So about

the renovation And of CLT, directly that so we this of later the in you'll most something product current in refrigerated some the scores the see significant is we've year well case the test out, all consumer right? the had coming where do above issues, targeted kind So market. at which

all Second, side, burger good looking really which on the people the all some advance at and really customers, true, in which food taste on new for the we're think, in side, a time introducing that I the done with I reviews exciting in products, we've century we've service testing experience. it's it, iteration consumer the example, gotten mentioned, and

we've So that some year, a give where categories in frozen will into Further will the innovation actually lift. us see down think the section been be I quieter. and going you'll some

excited And get program. to so I'm then that there's parity And price out.

where stores seeing do So in that we we're And of down we're price but to results. good not going we very all for you the starting control are noise, protein, that as the really tease some animal the to out can elasticity. way

that's Now limited are way the statement, in It's still -- data efforts more broad any a early. and these is and right? pretty not rough

we seeing the for straighter So information. nascent it just the caution to shakeout And a it is, is than against continues consumer. shot pricing we are finally, we'll have encouraging occur, what around that's think tests. then to those using some But as elasticity anything other

So we momentum. are building

quarter obviously Now is the second a quarter year. very, for lapping last us significant very

I million think revenue. in $XXX at

with and quarter X more comps. So about lower I think it's the really X

think decent seeing half the I being to year, and the get margin in business pretty second really back do. this which I'm growth of we're excited to going finally to again a

Peter comes America. Bank with question next of from Galbo The

and clarification question. actual my then quick one Just

first the understand kind Was Lubi, that's margin question. the change XQ? of pulled margin. wanted it really gross impact something And that gross around Just flow depreciation throughout to to higher then the would I just year? the through the the into rest the of be my of that only so continues Is kind to

Yes, sure.

large throughout done X we more had year moves because with moved anywhere of us line which more across years, sort previously our equipment. now uniform a to of XX to of industry manufacturing actually in number XX standards. large continue We've of equipment the we a a the years and range essentially, from where does it useful as reassessment mentioned, lives a we've our So

reason -- taking full will so the margin reason us primary that be And gross is the there the a for us actually the benefit, for for guidance up and year.

be be from tend won't seasonality. just which the be perspective, revenue it throughout Now of same strongest benefit necessarily and our to the a you to the look due quarters quarters won't at the when particularly year, our third year, second

expect we total percentage depreciation So, a revenues lower those. to in as of be net would

percentage our so is be And would by it X for guidance primarily margin X We full driven by gross said and that. increase previous guidance to we than year. higher the did points, it

Ethan, maybe, of we quarter, could questions. a some the sales I've the few go just then back And just gotten helpful. that's trends, Okay, on if

on the one obviously, underperformed U.S. retail, scan lot a of Just data.

was factors there. where and others, Foodservice, Just the of know a whether around some conscious but quarter would factor some think on I there's And load-in understand positive first of the trying then large to there the in of be to gap I helpful. International you the just delta, be plant of any pretty there mentioned kind the

no problem. Yes,

we've I you several progress see, we it also remains been look consumer, that TGX turbulence you I factors think, there inevitable to sense we're as Europe, are in and been foodservice. All of last to There's it. pointing in mom-and-pops, some of I begin the to a think this to And XXX% that. the at I business with the as the transition think that. spend exactly But international of of want really see, of making with to year-over-year, sort some in performance strategics what you're think, make I meat. overarching a which in in driving the but referencing disruption time is are you while the over that's European plant-based had There's obviously has lot the So growth trajectory years, occurring. transition

kind think, customer limited I market. that profoundly, so Yum like a really McDonald's show encouraging. very is major a or a do to And have of it progress so in and a

really going wasn't to progress. I to -- there no, in. continue thing a load it been just impressive. it's And It's line, this quarter-after-quarter but is be arc think the but progress straight So of hasn't

about. concentrating side, On on steps back animal there's meat gets quarter kind We're the tactical store much I retailers We're So have taste as system right? top talked It's you around it programs. a right the just of well, the the high retail for relationships We're now. in tough a and there. our working noise doing to to at very should that do retail making putting issues level lot and make programs marketing a in health. We're great this. of

the some at If around, experimenting results you and we're pricing that some seeing us that with look encouragement. decent gives actions

an day bad repeating understand We're study, the the switched a we're consumers meaningful. there, decisions that and protein just is X-week a our and the They period in this or had do for overdue day, and then, Propaganda than statistically putting also animal drop this of help bears key in and both -- over defending And decisions Health even past, then again, I Stanford doing the and approach products in cholesterol, weeks, X I've the need core talked if think beyond confusion, existing twice else animal make more rather a probably protein our I this, where consumers period. some nothing to SwapMeat about And products to are of of out study was X-week and that then they call a saw and back the twice on to significant saw in our drought. products phone it whether by informed it's lot in driven but by done, renovation information that putting terrific. terms people

in dropping, TMA heart is not which compound drops, LDL-cholesterol they're with just with the increasingly gut that the associating it's disease. So

So you benefit, see right? that

you -- American see Associates, American to partnership Heart there's the then, the product, And endorsing more see And then come. organizations Society. the you like can

We we other continue out we do. not study bringing medical are not that are issues. have that We're we truth criticizing going We're the there. not continue -- behind to research, doing that our community back these communicate to to We're But right? us together and the What have the putting inevitability the retail, points propaganda to the others doing is that. to of what's doing what proof this, companies. is stands bring products, in

half fun. health progress clear to again, a It's are new position that year. coming pricing the back those taste; And So, going here. week, second we're making marketing and and after drive are us in, to the of a gotten around products things exciting be growth to the week in

with The next Ben Barclays. [ph] question from comes

Hey Ethan, Lubi.

it's on you've international if the piece, in better growth was had the XXXX. just we quarter level in of follow service quarter? into the just in 'XX, of which wanted to stories before printed clearly the up the first back of what Pandemic Just And XQ kind of look food that kind one we the

expect you international Europe, foodservice year? we the have the that us where versus you it outlets what line are volume relates at item those XQ should as cadence you've back to helped of highlighted and relates the into in can to it XQ I basically levels of to as for put for some want these the rest that context partnerships the particular to itself understand we help how XXXX if 'XX maybe much So and

Good you for question. question. Thank the

let So out, Europe be for kind the of remarks, results And my be and the markets as traction I the But really one that McDonald's in you and to as making, results in as well the come plant select globally. the proud just their in some we're if and rules we're of partners to our follow really mine. see things you always reaction press burger good you working there proud with seeing progress. tried Germany, say, at of like. good the working reaction I see there. out see come the to see and press, can't Yum with consumer European McLean not see I've we share in And we're I share look you to speak then their the to some where results is nugget will -- mentioned to really

continue see at products to our is for chain, of work very to afford. can to partners that's years that after to need see And and investment with pay gratifying to do supply start years that what continue to something price provide a point we work everyday the our off with these So to is the us. consumer

benefit the of animal we're around the maintained we're clear like that, where always And protein. remarks, consumer, clearer health animal one taste as the parity, cases, those in they the get We're to and I've message that more prepared each in right? health driving We're this protein. again, more And and I it's right, my getting at the get we're at it point doing taste mentioned super reduction. the price below for and price of is get making to on

I I price. think, And putting this think I on I to want But a just prepared operations they're mix price pricing on it down is said in least surface. some That's pressure year-over-year, be at while the to X% some able restoring to deliver programs. products, impressive. also scratching margin out the we're positive really that the average to call team remarks, in of on we're shows, it the

that network to easier. scale globally, be our continue easier and gain and will And continue we as to optimize

roll So other but think we test, tip roll is, of sort in those time. strategy out the for again, into expect those I a over of to do is expect to the out. the them, speak markets of I one Europe, success and iceberg. It's of any been can't the successful we

question from next The comes Peter with BTIG. Saleh

around want food that quick. to Ethan, conversation I Great. to service come back real international

could seem it of resonating over over sort details much a in just they or with don't just give Europe Any work of help younger? there detail, U.S. you're seeing want to sense Europe? you give older on us who's how provide I they the identify income, Anything kind in might Are higher was trial that's -- the what Are that you You can versus provide guys your to some in you much of that maybe the is here too there? around purchases. product. lower characteristics finding the I us already but buying hoping of us repeat can customer know be success and success income?

Yes.

things that nature. I that will really contemplating of too is a the fact I repeat data think So with I say can't much But the good various partners that expansion thing. we're and dive into

less plant-based In there's climate category Europe, for health that as it think climate so the on strong is it's really and battling such for out consumers progressive piece behavior and Europe, on we that organizations is so are offerings. and in thing food And where environment, stake, are maybe need -- are developed about have it benefits we that true that on healthier focused strong amazing I to the so while of be example, again, fast right? think the the into in because hammering we're much a that around going U.S. there the which of so these health proactive to come on here deliver And and the major can credentials. you with situations

categories I But of those consumer And segments kind environment know see their here strong driven. in U.S. environmental health to is that, try encouraging. the lean be or seems here more very so, where going we U.S., develop in that to climate. it's other interest we certainly, really overnight It and the context into the don't to in

with closely XXs, roadblocks the kind traditional way right? far in we're ways thinking folks college product fewer them. of climate, might the get very and in it. or embrace the here of There way very their who's younger in So U.S. are that of the from is those different someone students here people age in U.S., the care about actually they working And

from here the European are find So that maybe dialed to consumer we environmental in the the U.S. of to lessons in face. we more pockets crisis that try urgency some do take and the the of

Capital BMO comes from question next The Andrew Markets. with Strelzik

to a price move strategy? margin think often parity This as price touch you also protecting to how some think is to goal. the consumer of that Understanding ask premium Matt challenges about in wanted up as turnaround growth comes we to the Lindon near-term about I I we [ph] relative balancing animal-based Andrew. plant-based to adoption on quickly. on proteins. wanted pricing point the execute When long-term is while price parity, for

great a That's question. Sure.

it's think total around emphasizing and profit margin. versus first dollars I really we foremost, are percent

so our focused that system some question. grocers of dollars more bigger And programs how here or about tackling is not of think profit through really U.S. things a being percent, rather we're of putting the in and going, volume helps to and us, in but right? that on so on just the way apply and And it getting some whether nature Europe with these

many this I and variables from, We think, think business X to are over piece moving. couple disruption second costs, X that also now of that lowering gets occurred it's years. back There's that co-packers last I just so to the doing while hard. went the to really that's the

We we've excited And around really going so what kind have our been to stable pathways some team some is environment. stable. of out that they doing that more the I'm start to do see in a more now getting are of leaning that

we've the out So, example, a for and like juice be stable kind a -- go. we're I a have much position, with don't to lot this, don't room more where of we more think more of in company of squeezed would already a stable

low-hanging of fruit amount to tremendous a grab here. have from We

over so these the And do can a achieve we pricing of margin a year targets. average we're in and where taking course reduction this X%

at within doing. waste step the having between product is can fun we're there, a profit you your and the product eliminate adopt what you you every before doing drive If we're And nice that's across and team that entrepreneurial you families you I poultry, you environment company. lean can, get families and create it. think adopting, methodology

question from Piper Lavery next with is Michael The Sandler.

you any just there Two questions. terms risk might that you can to have just just maybe talk outlook not. inventory or spoilage and on of And you maybe came bring partnership the and unfolds. jerky And is mentioned overall? a Can that there in-house the possibly you just there write-offs in about decision down thinking to wrestle also the little the related, your how with? touch But some from bit. What's -- related of

Sure. Yes.

one first. one second the first the take me let So --

utilize love think made we're able bringing this like good goal sense Pepsi. to that focus in-house, for flow yes, work be we So going more case, really to down towards to in-house to road. things. the We Jerky with growth. once particular the us more But cash start It that model to change in have we vehicle this operating positive, did some sustainable of on again,

size year, of we it, plant-based a the in think Turkey I product. X think, good like It's sixfold. market reached but We right. the the get I let's margin

margin. And bringing so off drag our that's and will take why house, of we're a that help that overall

levels the have program active about at inventory question a looking of are there. sport and very in we Your we

specific We use. that all to that sure have program a of to putting make we're

as control any can't write-off. there a goal to well so to aging have is to everything, we obviously as on agreements we reserves. have, We tight for continue monetize any But control excess the avoid keep very inventory

like, situation a have caught don't proactive ahead But make sure in to company really about people good quarters in several we you get So that. never being we very looking good that that about but the on and some don't that feel focused know.

that as there. So you're well at ingredients you're very goods inventory and levels if managing sure you good take those making toward both as WIP proactively, and looking finished outcome things where a

supply You overall chain equipment. throughout look we're at that, absorption get get increasing grow increasing the overhead lower our collaboration volumes fixed business; as the to you you to on the we do costs this have and throughput of kind

as within continue to waste at again slow. away system, to trying eliminate move just turn to from to then, every And we our much can trying as batch and

improvement forward. think these I What next of and us helping seen of margin of in see type the quarters, going was couple first things last I quarters are few that All the think over question? the the you'll you've drive

in trajectory outlook, place. inventory part due just have to Michael, these balances that, will sort to not of like necessarily The contracts pre-existing look some line that total sort inventory that that of of down, a we you which of but mentioned straight Ethan right, I'll the in addressed, add

we levels around the so that somewhat. inventory will do expect move And

just that is on of to achieve and of us are frankly, this done has think cash we the we're this than half on look objective said we substantially dependent but flow that and that levels our I a before year positive great us the will with this lower into straight back However, believe we've said we total too able quite we significantly of team focused job, absolutely very do said, end, our necessarily lowering that that. our down. where We've line right? And being still won't year end high, ours like in levels, inventory reducing a came inventory levels inventory year part

with last John Today's [ph] question comes Securities. from Mizuho

okay more Thanks for meat time. think expensive you the have and is question. over state. other as from premium central Does store refrigerated and harder culturally this commentary not Ethan, There's big temperature could now be even do lodge in right I suggest a animal lot really entrenched to that the may itself on performance your that would back pricing that competition I But doing well. in frozen, categories in think this what categories the be just issue. product

longer this sort there. out? the impressions would lodge your strategic point? you much think I just or meat Is pivot a X do Is get thought how when of guess have started eater animal runway more I look there independent like than to years forward, involved the to here the X going you in of about refrigerated you So high-level price frozen case?

that's a great question. Yes,

good it. ways of really bunch in a again, stuff think And to So I there. unpack some

major in our market. and right, be a a $X.X but first rather, item, is is high-priced trillion not it the our So player global right goal niche and be goal to our strategy foremost, -- protein to

taking after price we're have course, every right there's so -- And of go way certainly going to we in right? people And that less. been so can, and

were a should successful mainstream to consumer that penalty would at if we XX The It's the So to possible we generate of that return outsized refer case interested and interesting. is that very kind It ago make it sure because as not lot really can to there's want folks is getting really we're [ph] that. of not think years we as the and doing that for having box. the we just want we're interesting do suggestions to impact of the frozen-meat be the well. frozen case if

Cookout it's relative a percentage a pretty to data, But -- example, I ratio. if you our sales, and have think how Classic does burger look, for interesting the it's product of as bubble a

it's our is closer the -- that that's frozen point section. things. X One, fresh Classic about in -- the is section one to interesting X, animal And so where click-out in price what's the protein the than is

And how so you can this, ratio, that to but right. do dream be if if to this shouldn't would were a just powerful extrapolate get you minute, you the see you once proposition we like could

protein I the shop of And that's section, their think percent protein where obviously for fresh plate. animal consumers in mainstream, and so for

years I think have It ago. be we there. longer it X than do going X take to is successful to looked or like

Is Association profile that those like together. the things of one these seeing, Is is more the an it shelves breakthroughs and get know And certainly next as the endorsement it in again, to next right the products? the what's is never pricing, turn you off section. cases, taste our All So in to it's because it there? do coming the we of start in American it, some uplift come right? thing know, to iteration consumers Heart we of bring we're the something closer? But you when is, going fresh

give advantage So don't we in that traction I but take up frozen. the we'd clearly it, seeing we're on think of

turn I to This the concludes Ethan now to Brown call our closing remarks. for like question-and-answer would session. back

Thanks.

in, back is the is to think that we're said, growth, really corner. with of growth next some looking turning second to forward business we we're back of the to I margin is we're these reasonable and getting So high this next in to a This a reporting making year quarter the and instituting as the look forward I changes quarter, good, quarter. a but half comp, teams getting a feel

everybody. Thanks,

presentation. attending you Thank today's for

disconnect. now may You