BEYOND MEAT INC

Previous wording

The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including those set forth in Part I, Item 1A, “Risk Factors,” of our 2023 10-K and Part II, Item 1A, “Risk Factors” and “Note Regarding Forward-Looking Statements” included elsewhere in this report and those discussed in other documents we file from time to time with the SEC. The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes and other financial information included in this quarterly report and our audited consolidated financial statements and related notes included in our 2023 10-K. Our historical results are not necessarily indicative of the results to be expected for any future periods and our operating results for the three months ended March 30, 2024 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2024 or for any other interim period or for any other future year or period.

Current wording

The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including those set forth in Part I, Item 1A, “Risk Factors,” of our 2023 10-K and Part II, Item 1A, “Risk Factors” and “Note Regarding Forward-Looking Statements” included elsewhere in this report and those discussed in other documents we file from time to time with the SEC. The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes and other financial information included in this quarterly report and our audited consolidated financial statements and related notes included in our 2023 10-K. Our historical results are not necessarily indicative of the results to be expected for any future periods and our operating results for the three and six months ended June 29, 2024 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2024 or for any other interim period or for any other future year or period.

Previous wording

We sell a range of plant-based meat products across our three core platforms of beef, pork and poultry. As of March 2024, Beyond Meat branded products were available at approximately 130,000 retail and foodservice outlets in more than 65 countries worldwide, across mainstream grocery, mass merchandiser, club store and natural retailer channels, and various food-away-from-home channels, including restaurants, foodservice outlets and schools. The number of retail and foodservice outlets where Beyond Meat branded products are available was derived from rolling 52-week data as of March 2024 and excludes retail outlets unique to Beyond Meat Jerky. In 2023, as part of our Global Operations Review, we made the decision to discontinue the Beyond Meat Jerky product line.

Current wording

We sell a range of plant-based meat products across our three core platforms of beef, pork and poultry. As of June 2024, Beyond Meat branded products were available at approximately 130,000 retail and foodservice outlets in more than 60 countries worldwide, across mainstream grocery, mass merchandiser, club store and natural retailer channels, and various food-away-from-home channels, including restaurants, foodservice outlets and schools. The number of retail and foodservice outlets where Beyond Meat branded products are available was derived from rolling 52-week data as of June 2024 and excludes retail outlets unique to Beyond Meat Jerky. In 2023, as part of our Global Operations Review, we made the decision to discontinue the Beyond Meat Jerky product line.

Previous wording

In response to the current difficult environment and the negative impact of certain factors on our business and the overall plant-based meat category, beginning in 2022 we pivoted our focus toward sustainable long-term growth supported by three pillars: (1) driving margin recovery and operating expense reduction through the implementation of lean value streams across our beef, pork and poultry platforms; (2) inventory reduction and cash flow generation through more efficient inventory management; and (3) focusing on near-term retail and foodservice growth drivers while supporting strategic key long-term partners and opportunities. Based on cost reduction initiatives intended to reduce operating expenses, in August 2022 and October 2022, we implemented reductions in force affecting approximately 4% and 19%, respectively, of our global workforce.

Current wording

In response to the current difficult environment and the negative impact of certain factors on our business and the overall plant-based meat category, beginning in 2022 we pivoted our focus toward sustainable long-term growth supported by three pillars: (1) driving margin recovery and operating expense reduction through the implementation of lean value streams across our beef, pork and poultry platforms; (2) inventory reduction and cash flow generation through more efficient inventory management; and (3) focusing on near-term retail and foodservice growth drivers while supporting strategic key long-term partners and opportunities.

Previous wording

To further reduce operating expenses, in November 2023, we initiated a Global Operations Review, narrowing our commercial focus to certain growth opportunities, and accelerating activities that prioritize gross margin expansion and cash generation. These efforts may include the exit or discontinuation of select product lines such as Beyond Meat Jerky; changes to our pricing architecture within certain channels including the recent and planned future price increases of certain of our products; accelerated, cash-accretive inventory reduction initiatives; further optimization of our manufacturing capacity and real estate footprint; and the continued review of our operations in China. As a result of this review, on November 1, 2023, our board of directors approved a plan to reduce our workforce by approximately 65 employees, representing approximately19% of our global non-production workforce (or approximately 8% of our total global workforce). We may not be able to fully realize the cost savings and benefits initially anticipated from our cost reduction initiatives and Global Operations Review, and the realized costs may be greater than expected.

Current wording

To further reduce operating expenses, in November 2023, we initiated our Global Operations Review, which involves narrowing our commercial focus to certain growth opportunities, and accelerating activities that prioritize gross margin expansion and cash generation. These efforts have to date included, and may in the future include, the exit or discontinuation of select product lines such as Beyond Meat Jerky; changes to our pricing architecture within certain channels including the recent price increases of certain of our products in our U.S. retail and foodservice channels; accelerated, cash-accretive inventory reduction initiatives; further optimization of our manufacturing capacity and real estate footprint; and the review of our operations in China. As a result of this review, on November 1, 2023, our board of directors approved a plan to reduce our workforce by approximately 65 employees, representing approximately 19% of our global non-production workforce (or approximately 8% of our total global workforce). We may not be able to fully realize the cost savings and benefits initially anticipated from our cost reduction initiatives and Global Operations Review, and the realized costs may be greater than expected.

Previous wording

In the first quarter of 2024, our net revenues, gross profit, gross margin, earnings and cash flows continued to be adversely impacted by the following, each of which may continue to impact our business and financial condition in the future:

Current wording

In recent periods, our net revenues, gross profit, gross margin, earnings and cash flows have been adversely impacted by the following, each of which may continue to impact our business and financial condition in the future:

Previous wording

•continued weak demand and its resultant impact on our sales due to slower category growth, particularly for refrigerated plant-based meat, unfavorable changes in consumers’ perceptions about the health attributes of plant-based meats and increased competitive activity;

Current wording

•continued weak demand and its resultant impact on our sales due to slower category growth, particularly for refrigerated plant-based meat;

Previous wording

•negative impacts on capacity utilization as a result of lower than anticipated revenues, which have in the past and could in the future give rise to increased costs per unit, underutilization fees and termination fees and other costs to exit certain supply chain arrangements and product lines, and/or the write-down or write-off of certain equipment, driving less leverage on fixed costs and delaying the speed at which cost savings initiatives positively impact our financial results;

Current wording

•negative impacts on capacity utilization as a result of lower than anticipated revenues, which have in the past and could in the future give rise to increased costs per unit, underutilization fees, termination fees and other costs to exit certain supply chain arrangements and product lines, and/or the write-down or write-off of certain equipment and other fixed assets, driving less leverage on fixed costs and delaying the speed at which cost savings initiatives positively impact our financial results;

Previous wording

•changes in our pricing strategy, including actions intended to improve our price competitiveness relative to competing products or to improve profitability;

Current wording

•changes in our pricing strategy, including actions intended to improve our price competitiveness relative to competing products or to improve profitability, such as the recent price increases of certain of our products in our U.S. retail and foodservice channels;

Previous wording

We generate net revenues primarily from sales of our products to our customers across mainstream grocery, mass merchandiser, club store and natural retailer channels, and various food-away-from-home channels, including restaurants, foodservice outlets and schools, mainly in the United States and the EU.

Current wording

We generate net revenues primarily from sales of our products to our customers across mainstream grocery, mass merchandiser, club store and natural retailer channels, and various food-away-from-home channels, including restaurants, foodservice outlets and schools, mainly in the United States, the EU and Canada. Following our Global Operations Review, in recent periods, as part of our effort to reduce excess or obsolete inventory and generate incremental cash, we have also generated net revenues from sales of ingredients.

Previous wording

(1)Net revenues associated with Beyond Meat Jerky sold to TPP in the three months ended March 30, 2024 and April 1, 2023 were $0 and $5.3 million, respectively. In 2023, as part of our Global Operations Review, we made the decision to discontinue the Beyond Meat Jerky product line.

Current wording

(1)Net revenues associated with Beyond Meat Jerky sold to the Planet Partnership, LLC (“TPP”) in the three months ended June 29, 2024 and July 1, 2023 were $0. Net revenues associated with Beyond Meat Jerky sold to TPP in the six months ended June 29, 2024 and July 1, 2023 were $0 and $5.3 million, respectively. In 2023, as part of our Global Operations Review, we made the decision to discontinue the Beyond Meat Jerky product line.

Previous wording

The following factors and trends in our business have driven net revenue growth over prior periods and are expected to be key drivers of our net revenue growth over time, subject to the challenges discussed above:

Current wording

The following factors and trends in our business have driven net revenue generation in prior periods and are expected to be key drivers of net revenue generation over time, subject to the challenges discussed above:

Previous wording

•increased penetration across our retail channel, including mainstream grocery, mass merchandiser, club store and natural retailer channels, and our foodservice channel, including increased desire by foodservice establishments, including large Full Service Restaurant and/or global QSR customers, to add plant-based products to their menus and to highlight and retain these offerings;

Current wording

•increased penetration across our retail channel, including mainstream grocery, mass merchandiser, club store and natural retailer channels, and our foodservice channel, including increased desire by colleges and schools, foodservice establishments, including large Full Service Restaurant and/or global QSR customers, to add plant-based products to their menus and to highlight and retain these offerings;

Previous wording

•the success of our pivot to focus on sustainable long-term growth, including focusing on near-term retail and foodservice growth drivers while supporting strategic key long-term partners and opportunities, and intensifying focus on channels and geographies that are exhibiting revenue growth;

Current wording

•the success of our pivot to focus on sustainable long-term growth, including focusing on near-term retail and foodservice growth drivers while supporting key strategic long-term partners and opportunities, and intensifying focus on channels and geographies that are exhibiting revenue growth;

Previous wording

•our continued innovation and product commercialization, including enhancing existing products such as the announcement of our Beyond IV generation of products, which we began shipping to customers in the first quarter of 2024, our plant-based platforms that appeal to a broad range of consumers, specifically those who typically eat animal-based meat;

Current wording

•our continued innovation and product commercialization, including the introduction of new products and improvement of existing products, such as our Beyond IV generation of products, that appeal to a broad range of consumers, specifically those who typically eat animal-based meat;

Previous wording

•enhanced marketing efforts and the success thereof, as we continue to build our brand, use our portfolio and marketing to directly counter misinformation about our products and category, amplify our value proposition around taste, health and planet, serve as a best-in-class partner to both retail and foodservice customers to support product development and category management, and drive consumer adoption of our products;

Current wording

•enhanced marketing efforts and the success thereof, as we continue to build our brand, use our portfolio and marketing to directly counter misinformation about our products and the plant-based meat category, amplify our value proposition around taste, health and planet, serve as a best-in-class partner to both retail and foodservice customers to support product development and category management, and drive consumer adoption of our products;

Previous wording

We routinely offer sales discounts and promotions through various programs to customers and consumers. These programs include rebates, temporary on-shelf price reductions, off-invoice discounts, retailer advertisements, product coupons and other trade activities. The expense associated with these discounts and promotions is estimated and recorded as a reduction in total gross revenues in order to arrive at reported net revenues. At the end of each accounting period, we recognize a contra asset to “Accounts receivable” for estimated sales discounts that have been incurred but not paid which totaled $5.1 million and $6.9 million as of March 30, 2024 and December 31, 2023, respectively. We continue to face increasing competition across all channels, and we expect that trend to continue, especially if consumers continue to trade down among proteins in the context of significant inflationary pressure. Moving forward we expect to continue to invest in promotional discounting to address the current consumer trend with more targeted key selling period activations that we expect will allow us to scale back overall trade spending and continue to build brand awareness and increase consumer trials of our products.

Current wording

We routinely offer sales discounts and promotions through various programs to customers and consumers. These programs include rebates, temporary on-shelf price reductions, off-invoice discounts, retailer advertisements, product coupons and other trade activities. The expense associated with these discounts and promotions is estimated and recorded as a reduction in total gross revenues in order to arrive at reported net revenues. At the end of each accounting period, we recognize a contra asset to “Accounts receivable” for estimated sales discounts that have been incurred but not paid which totaled $6.3 million and $6.9 million as of June 29, 2024 and December 31, 2023, respectively. We continue to face increasing competition across all channels, and we expect that trend to continue, especially if consumers continue to trade down among proteins in the context of significant inflationary pressure. Moving forward we expect to continue to invest in promotional discounting to address the current consumer trend with more targeted key selling period activations that we expect will allow us to scale back overall trade spending and continue to build brand awareness and increase consumer trials of our products.

Previous wording

In addition, because we do not have any purchase commitments from our distributors or customers, the amount of net revenues we recognize has varied and will vary in the future, from period to period depending on the volume, timing and the channels through which our products are sold, and the impact of customer orders ahead of holidays, causing variability in our results. Similarly, the timing of retail shelf resets are not within our control, and to the extent that retail customers change the timing of such events, variability of our results may also increase. Lower customer orders ahead of holidays, shifts in customer shelf reset activity and changes in order patterns of one or more of our large retail customers could cause a significant fluctuation in our quarterly results and could have a disproportionate effect on our results of operations for the entire fiscal year.

Current wording

In addition, because we do not have any purchase commitments from our distributors or customers, the amount of net revenues we recognize has varied and will vary in the future, from period to period, depending on the volume, timing and channels through which our products are sold, and the impact of customer orders ahead of holidays, causing variability in our results. Similarly, the timing of retail shelf resets are not within our control, and to the extent that retail customers change the timing of such events, variability of our results may also increase. Lower customer orders ahead of holidays, shifts in customer shelf reset activity and changes in order patterns of one or more of our large retail customers could cause a significant fluctuation in our quarterly results and could have a disproportionate effect on our results of operations for the entire fiscal year.

Previous wording

Our financial performance also depends on our operational effectiveness and ability to fulfill orders in full and on time. Disruptions in our supply chain could affect customer demand, orders that may not materialize due to delayed deliveries and subsequent lost sales that we may not be able to recover in full, or at all.

Current wording

Our financial performance also depends on our operational effectiveness and ability to fulfill orders in full and on time. Disruptions in our supply chain could affect customer demand, resulting in orders that may not materialize due to delayed deliveries and subsequent lost sales that we may not be able to recover in full, or at all.

Previous wording

Generally, we expect to experience greater demand for certain of our products during the U.S. summer grilling season. In 2023 and 2022, U.S. retail channel net revenues during the second quarter were 10% and 16% higher than the first quarter, respectively. While we expected to continue to see additional seasonality effects in 2023, as compared to 2022, we saw more muted effects from seasonality in the third and fourth quarters of 2023 as compared to the prior-year period and the second quarter of 2023, primarily reflecting weak category demand and pricing actions. In general, any historical effects of seasonality have been more pronounced within our U.S. retail channel, with revenue contribution from this channel generally tending to be greater in the second and third quarters of the year, driven by increased levels of grilling activity, higher levels of purchasing by customers ahead of holidays, the impact of customer shelf reset activity and the timing of product restocking by our retail customers. In an environment of heightened uncertainty from recessionary and inflationary pressures, prolonged weakness in the plant-based meat category, competition and other factors impacting our business, we are unable to assess the ultimate impact on the demand for our products as a result of seasonality.

Current wording

Generally, we expect to experience greater demand for certain of our products during the U.S. summer grilling season. In 2024, 2023 and 2022, U.S. retail channel net revenues during the second quarter were 21%, 10% and 16% higher than the first quarter, respectively. While we expected to continue to see additional seasonality effects in 2023, as compared to 2022, we saw more muted effects from seasonality in the third and fourth quarters of 2023 as compared to the prior-year periods and the second quarter of 2023, primarily reflecting weak category demand and pricing actions. In general, any historical effects of seasonality have been more pronounced within our U.S. retail channel, with revenue contribution from this channel generally tending to be greater in the second and third quarters of the year, driven by increased levels of grilling activity, higher levels of purchasing by customers ahead of holidays, the impact of customer shelf reset activity and the timing of product restocking by our retail customers. In an environment of heightened uncertainty from recessionary and inflationary pressures, prolonged weakness in the plant-based meat category, competition and other factors impacting our business, we are unable to assess the ultimate impact on the demand for our products as a result of seasonality.

Previous wording

Subject to the recessionary and inflationary pressures, competition, prolonged weakness in the plant-based meat category and other factors impacting our business, which are discussed above, we continue to expect that long-term gross profit and gross margin improvements will be delivered primarily through:

Current wording

Subject to recessionary and inflationary pressures, prolonged weakness in the plant-based meat category, competition and other factors impacting our business, which are discussed above, we continue to expect that long-term gross profit and gross margin improvements will be delivered primarily through:

Previous wording

•reviewing and adjusting our pricing architecture within certain channels including the recent and planned future price increases of certain of our products;

Current wording

•reviewing and adjusting our pricing architecture within certain channels including the recent price increases of certain of our products in our U.S. retail and foodservice channels;

Previous wording

Gross margin improvement may, however, continue to be negatively impacted by reduced capacity utilization if demand for our products continues to decline, investments in our production infrastructure across the U.S., EU and China in advance of anticipated demand, which may not materialize within the expected timeframe, investing in production personnel, partnerships and product pipeline, aggressive pricing strategies and increased discounting, increases in inventory provision, write-down or write-off of obsolete inventory and potentially increased sales to liquidation channels at lower prices, changes in our product and customer sales mix, expansion into new geographies and markets where cost and pricing structures may differ from our existing markets, and underutilization fees, termination fees and other costs to exit certain supply chain arrangements and product lines. Gross margin improvement may also be negatively impacted by the impact of inflation, increasing labor costs, materials costs and transportation costs.

Current wording

Gross margin improvement may, however, continue to be negatively impacted by reduced capacity utilization if demand for our products continues to decline, investments in our production infrastructure across the U.S., EU and China in advance of anticipated demand, which may not materialize within the expected timeframe, investment in production personnel, partnerships and product pipeline, aggressive pricing strategies and increased discounting, increases in inventory provision, write-down or write-off of obsolete inventory and potentially increased sales to liquidation channels at lower prices, changes in our product and customer sales mix, expansion into new geographies and markets where cost and pricing structures may differ from our existing markets, and underutilization fees, termination fees and other costs to exit certain supply chain arrangements and product lines. Gross margin improvement may also be negatively impacted by the impact of inflation, and increasing labor costs, materials costs and transportation costs.

Previous wording

The following table sets forth selected items in our condensed consolidated statements of operations for the respective periods presented:

Current wording

The following table sets forth selected items in our condensed consolidated statements of operations for the respective periods presented (unaudited):

Previous wording

The following table presents selected items in our condensed consolidated statements of operations as a percentage of net revenues for the respective periods presented:

Current wording

The following table presents selected items in our condensed consolidated statements of operations as a percentage of net revenues for the respective periods presented (unaudited):

Previous wording

Three Months Ended March 30, 2024 Compared to Three Months Ended April 1, 2023 (unaudited)

Current wording

Three and Six Months Ended June 29, 2024 Compared to Three and Six Months Ended July 1, 2023 (unaudited)

Previous wording

Net revenues from U.S. foodservice sales in the three months ended March 30, 2024 decreased $2.4 million, or 16.2%, as compared to the prior-year period, primarily due to a 20.7% decrease in volume of products sold, primarily reflecting loss of distribution for certain items and demand softness in the category, partially offset by a 5.8% increase in net revenue per pound, primarily resulting from changes in product sales mix and lower trade discounts. By product, the decrease in U.S. foodservice channel net revenues was primarily due to decreased sales of Beyond Burger, Beyond Breakfast Sausage and Beyond Beef Crumbles, partially offset by increased sales of Beyond Sausage and sales of Beyond Steak. Beyond Meat branded products were available at approximately 40,000 U.S. foodservice outlets as of March 2024.

Current wording

Net revenues from U.S. foodservice sales in the three months ended June 29, 2024 decreased $2.4 million, or 18.9%, as compared to the prior-year period, primarily due to a 20.0% decrease in volume of products sold, primarily reflecting weak category demand and, to a lesser extent, distribution losses, partially offset by a 1.4% increase in net revenue per pound, primarily driven by price increases of certain of our products and changes in product sales mix, partially offset by increased trade discounts. By product, the decrease in U.S. foodservice channel net revenues was primarily due to decreased sales of Beyond Burger and Beyond Beef, partially offset by increased sales of chicken products including Beyond Chicken Tenders, Beyond Chicken Nuggets and Beyond Popcorn Chicken. Beyond Meat branded products were available at approximately 39,000 U.S. foodservice outlets as of June 2024.

Previous wording

Net revenues from international retail sales in the three months ended March 30, 2024 decreased $1.7 million, or 12.0%, as compared to the prior-year period, primarily due to a 12.7% decrease in volume of products sold, , primarily reflecting reduced sales of chicken products in the EU and softer demand for certain products in Canada, partially offset by a 0.8% increase in net revenue per pound. The increase in net revenue per pound was primarily due to lower trade discounts, changes in product sales mix and favorable changes in foreign currency exchange rates, partially offset by reduced pricing of certain products. By product, the decrease in international retail channel net revenues was primarily due to decreased sales of chicken products including Beyond Chicken Tenders and decreased sales of Beyond Sausage, partially offset by increased sales of Beyond Steak. Beyond Meat branded products were available at approximately 36,000 international retail outlets as of March 2024.

Current wording

Net revenues from international retail sales in the three months ended June 29, 2024 decreased $2.4 million, or 12.1%, as compared to the prior-year period, primarily due to a 6.9% decrease in net revenue per pound and a 5.5% decrease in volume of products sold, primarily reflecting reduced sales of chicken products in the EU and, to a lesser extent, demand softness in certain geographic regions. The decrease in net revenue per pound was primarily due to unfavorable changes in foreign currency exchange rates, increased trade discounts and pricing changes, partially offset by changes in product sales mix. By product, the decrease in international retail channel net revenues was primarily due to decreased sales of chicken products including Beyond Chicken Tenders and decreased sales of Beyond Beef. Beyond Meat branded products were available at approximately 37,000 international retail outlets as of June 2024.

Previous wording

Net revenues from international foodservice sales in the three months ended March 30, 2024 decreased $5.5 million, or 28.7%, as compared to the prior-year period, primarily due to a 25.0% decrease in volume of products sold primarily reflecting reduced sales of burger and chicken products, including as a result of initial sell-ins to large QSR customers in the year-ago period, and a 4.9% decrease in net revenue per pound, primarily resulting from higher trade discounts, partially offset by changes in product sales mix and favorable changes in foreign currency exchange rates. By product, the decrease in international foodservice channel net revenues was primarily due to decreased sales of burger and chicken products including as a result of initial sell-ins to large QSR customers in the prior-year period and decreased sales of Beyond Meatballs and Beyond Beef Crumbles. Beyond Meat branded products were available at approximately 25,000 international foodservice outlets as of March 2024.

Current wording

Net revenues from international foodservice sales in the three months ended June 29, 2024 decreased $0.5 million, or 2.5%, as compared to the prior-year period, primarily due to a 1.4% decrease in volume of products sold and a 0.9% decrease in net revenue per pound. The decrease in net revenue per pound was primarily due to unfavorable changes in foreign currency exchange rates and changes in product sales mix, partially offset by lower trade discounts and pricing changes. By product, the decrease in international foodservice channel net revenues was primarily due to decreased sales of Beyond Beef Crumbles. Beyond Meat branded products were available at approximately 25,000 international foodservice outlets as of June 2024.

Previous wording

Net revenues in the three months ended March 30, 2024 decreased $16.6 million, or 18.0%, as compared to the prior-year period, primarily driven by a 16.1% decrease in volume of products sold and a 2.3% decrease in net revenue per pound. The decrease in net revenue per pound was primarily driven by increased trade discounts and, to a lesser extent, pricing changes, partially offset by favorable changes in foreign currency exchange rates. The decrease in volume of product sold primarily reflected weak category demand and reduced sales of Beyond Meat Jerky which is in the process of being discontinued. Net revenues from sales of Beyond Meat Jerky to TPP were $0 in the three months ended March 30, 2024, as compared to $5.3 million in the prior-year period. Net revenues in the three months ended March 30, 2024 included $1.6 million from ingredient sales.

Current wording

Net revenues in the six months ended June 29, 2024 decreased $25.6 million, or 13.2%, as compared to the prior-year period, primarily driven by a 15.0% decrease in volume of products sold, partially offset by a 2.0% increase in net revenue per pound. The decrease in volume of products sold primarily reflected weak category demand and reduced sales of Beyond Meat Jerky which has been discontinued. Net revenues from sales of Beyond Meat Jerky to TPP were $0 in the six months ended June 29, 2024, as compared to $5.3 million in the prior-year period, including the recognition of a $2.0 million non-refundable up-front fee in the six months ended July 1, 2023. The increase in net revenue per pound was primarily driven by price increases of certain of our products in our U.S. retail and foodservice channels, lower trade discounts and changes in product sales mix, partially offset by unfavorable changes in foreign currency exchange rates.

Previous wording

Cost of goods sold decreased $14.1 million, or 16.4%, to $71.9 million, in the three months ended March 30, 2024 as compared to the prior-year period. As a percentage of net revenues, cost of goods sold increased to 95.1% of net revenues in the three months ended March 30, 2024 from 93.3% of net revenues in the prior-year period. The decrease in cost of goods sold was primarily due to lower volume of products sold, and, to a lesser extent, decreased cost per pound. On a per pound basis, cost of goods sold decreased primarily due to lower inventory provision and lower logistics costs, partially offset by higher manufacturing costs including depreciation and higher materials costs.

Current wording

Cost of goods sold decreased $20.4 million, or 20.4%, to $79.5 million, in the three months ended June 29, 2024 as compared to the prior-year period. As a percentage of net revenues, cost of goods sold decreased to 85.3% of net revenues in the three months ended June 29, 2024, from 97.8% of net revenues in the prior-year period. The decrease in cost of goods sold was primarily due to lower volume of products sold, and, to a lesser extent, decreased cost per pound. On a per pound basis, cost of goods sold decreased primarily due to lower inventory provision, lower manufacturing costs including depreciation, and lower logistics costs, partially offset by higher materials costs.

Previous wording

Gross profit in the three months ended March 30, 2024 was $3.7 million as compared to $6.2 million in the prior-year period, a decrease of $2.5 million, or 40.7%. Gross margin in the three months ended March 30, 2024 decreased to 4.9% from 6.7% in the prior-year period. Gross profit and gross margin in the three months ended March 30, 2024 decreased primarily due to a 16.1% decrease in volume of products sold, higher manufacturing costs, including depreciation, higher materials costs and lower net revenues per pound, partially offset by lower inventory provision and, to a lesser extent, lower logistics costs per pound.

Current wording

Gross profit in the three months ended June 29, 2024 was $13.7 million as compared to $2.3 million in the prior-year period, an increase of $11.4 million, or 503.5%. Gross margin in the three months ended June 29, 2024 increased to 14.7% from 2.2% in the prior-year period. Gross profit and gross margin in the three months ended June 29, 2024 as compared to the prior-year period were positively impacted by lower cost of goods sold per pound and higher net revenue per pound, partially offset by decreased volume of products sold.

Previous wording

Research and development expenses decreased $2.6 million, or 20.7%, in the three months ended March 30, 2024, as compared to the prior-year period. Research and development expenses decreased primarily due to lower salaries and related expenses resulting from a reduction in headcount compared to the prior-year period.

Current wording

Research and development expenses decreased $3.3 million, or 37.5%, in the three months ended June 29, 2024, as compared to the prior-year period. Research and development expenses decreased to 5.9% of net revenues in the three months ended June 29, 2024 from 8.6% of net revenues in the prior-year period. The decrease in research and development expenses was primarily due to lower expenses from in-sourcing trial production work, lower salaries and related expenses resulting from the reduction in headcount implemented in 2023, and lower scale-up expenses compared to the prior-year period.

Previous wording

SG&A expenses decreased $4.6 million, or 8.9%, to $47.3 million in the three months ended March 30, 2024, from $51.9 million in the prior-year period. The decrease in SG&A expenses was primarily due to a $6.4 million decrease in salaries and related expenses including $3.7 million in lower share-based compensation expense resulting from a lower headcount, $3.7 million in lower loss on sale of fixed assets, $3.4 million in lower advertising expenses, $1.1 million in lower outbound freight costs and $1.0 million in lower product donation costs, partially offset by a $7.5 million accrual related to a binding settlement term sheet entered into on May 6, 2024 in connection with the settlement of certain consumer class action lawsuits that originated in 2022, $1.2 million in higher supply chain-related expenses, $0.6 million in higher consulting fees, and $0.5 million in higher information technology-related expenses. See Note 9, Commitments and Contingencies, and Note 13, Subsequent Event, to the Notes to Unaudited Condensed Consolidated Financial Statements included elsewhere in this report.

Current wording

SG&A expenses decreased $9.9 million, or 10.0%, to $89.4 million, or 53.0% of net revenues in the six months ended June 29, 2024, from $99.4 million, or 51.1% of net revenues in the prior-year period. The decrease in SG&A expenses was primarily due to $5.6 million in lower share-based compensation expense, $4.8 million in lower advertising expenses, $3.4 million in lower loss on sale of fixed assets, $3.3 million in lower salaries and related expenses, $3.2 million in lower product donation expenses and $2.1 million in lower outbound freight expenses, partially offset by $1.9 million in higher supply chain expenses, $1.7 million in higher consulting and professional services expenses, and $0.6 million in higher commissions. SG&A expenses in the six months ended June 29, 2024 included $7.5 million related to a class action settlement agreement, which is subject to preliminary and final court approval, in connection with the settlement of certain consumer class action lawsuits that originated in 2022.

Previous wording

Loss from operations in the three months ended March 30, 2024 was $53.5 million compared to $57.7 million in the prior-year period. The decrease in loss from operations was driven by the reduction in operating expenses, partially offset by reduced gross profit. Loss from operations in the three months ended March 30, 2024 was negatively impacted by the $7.5 million accrual related to a binding settlement term sheet entered in connection with the settlement of certain consumer class action lawsuits that originated in 2022.

Current wording

Loss from operations in the six months ended June 29, 2024 was $87.4 million compared to $111.5 million in the prior-year period. The decrease in loss from operations was primarily driven by higher gross profit and the reduction in operating expenses. Loss from operations in the six months ended June 29, 2024 was negatively impacted by $7.5 million in SG&A expenses related to a class action settlement agreement, which is subject to preliminary and final court approval, in connection with the settlement of certain consumer class action lawsuits that originated in 2022.

Previous wording

Total other (expense) income, net in the three months ended March 30, 2024 of $(0.9) million consisted primarily of $(2.3) million in realized and unrealized foreign currency transaction losses due to unfavorable changes in foreign currency exchange rates of the Euro and the Chinese Yuan and $(1.0) million in interest expense from the amortization of convertible debt issuance costs, partially offset by $2.0 million in interest income and $0.5 million in subsidies received from the Jiaxing Economic Development Zone Finance Bureau related to our investment in our subsidiary, Beyond Meat (Jiaxing) Food Co., Ltd. (“BYND JX”). Total other income (expense), net in the three months ended April 1, 2023 of $1.9 million consisted primarily of $2.7 million in interest income and $0.3 million in realized and unrealized foreign currency transaction gains, due to favorable changes in foreign currency exchange rates of the Euro and Chinese Yuan, partially offset by $(1.0) million in interest expense from the amortization of convertible debt issuance costs.

Current wording

Total other (expense) income, net, in the six months ended June 29, 2024 of $(1.4) million consisted primarily of $(3.5) million in realized and unrealized foreign currency transaction losses due to unfavorable changes in foreign exchange rates of the Euro and Chinese Yuan and $(2.0) million in interest expense from the amortization of convertible debt issuance costs, partially offset by $3.7 million in interest income and $0.5 million in subsidies received from the Jiaxing Economic Development Zone Finance Bureau related to our investment in our subsidiary, Beyond Meat (Jiaxing) Food Co., Ltd. Total other (expense) income, net, in the six months ended July 1, 2023 of $2.7 million consisted primarily of $5.7 million in interest income, partially offset by $(2.0) million in interest expense from the amortization of convertible debt issuance costs and $(0.7) million in realized and unrealized foreign currency transaction losses due to unfavorable changes in foreign currency exchange rates of the Euro and Chinese Yuan.

Previous wording

Net loss was $54.4 million in the three months ended March 30, 2024, compared to $59.0 million in the prior-year period. Net loss per common share was $0.84 in the first quarter of 2024, compared to $0.92 in the year-ago period. The decrease in net loss was primarily driven by the reduction in loss from operations and a reduction in losses related to TPP, partially offset by a reduction in Other income, net. Net loss in the three months ended March 30, 2024 was also negatively impacted by the $7.5 million accrual related to a binding settlement term sheet entered into in connection with the settlement of certain consumer class actions that originated in 2022.

Current wording

Net loss was $88.8 million in the six months ended June 29, 2024, as compared to $112.5 million in the prior-year period. Net loss per common share in the six months ended June 29, 2024 was $1.37, as compared to $1.76 in the prior-year period. The decrease in net loss was primarily due to higher gross profit, lower operating expenses and a $3.7 million reduction in losses related to TPP, partially offset by a reduction in Total other (expense) income, net. Net loss in the six months ended June 29, 2024 was negatively impacted by $7.5 million in SG&A expenses related to a class action settlement agreement, which is subject to preliminary and final court approval, in connection with the settlement of certain consumer class action lawsuits that originated in 2022.

Previous wording

On May 10, 2023, we filed an automatic shelf registration statement on Form S-3 (the “2023 Shelf Registration Statement”) with the SEC registering an indeterminate amount of our common stock, preferred stock, debt securities, warrants, purchase contracts and units (collectively, “Company securities”). On March 18, 2024, we filed an updated shelf registration statement on Form S-3 (the “2024 Shelf Registration Statement”), which the SEC declared effective on April 12, 2024 and which replaced the 2023 Shelf Registration Statement. The 2024 Shelf Registration Statement allows us to sell, from time to time and at our discretion, Company securities having an aggregate offering price of up to $250.0 million including shares of common stock that may be sold pursuant to our equity distribution agreement (the “Equity Distribution Agreement”) with Goldman Sachs & Co. LLC (“Goldman Sachs”), as sales agent, under an “at the market” offering program (the “ATM Program”).

Current wording

In May 2023, we filed an automatic shelf registration statement on Form S-3 (the “2023 Shelf Registration Statement”) with the SEC registering an indeterminate amount of our common stock, preferred stock, debt securities, warrants, purchase contracts and units (collectively, “Company securities”). On March 18, 2024, we filed an updated shelf registration statement on Form S-3 (the “2024 Shelf Registration Statement”), which the SEC declared effective on April 12, 2024 and which replaced the 2023 Shelf Registration Statement. The 2024 Shelf Registration Statement allows us to sell, from time to time and at our discretion, Company securities having an aggregate offering price of up to $250.0 million including up to $200.0 million in shares of common stock that may be sold pursuant to our equity distribution agreement (the “Equity Distribution Agreement”) with Goldman Sachs & Co. LLC (“Goldman Sachs”), as sales agent, under an “at the market” offering program (the “ATM Program”).

Previous wording

Pursuant to the Equity Distribution Agreement, we will pay Goldman Sachs a commission equal to 3.25% of the aggregate gross proceeds of any shares sold through Goldman Sachs pursuant to the Equity Distribution Agreement. We intend to use the net proceeds, if any, from sales of common stock issued under the ATM Program for general corporate and working capital purposes. The timing of any sales and the number of shares sold, if any, will depend on a variety of factors to be determined and considered by us. We are not obligated to sell any shares under the Equity Distribution Agreement. As of March 30, 2024, no sales had been made under the Equity Distribution Agreement and the ATM Program’s full capacity remained available.

Current wording

Pursuant to the Equity Distribution Agreement, we may offer and sell common stock having an aggregate offering price of up to $200.0 million from time to time to or through Goldman Sachs, as the sales agent, subject to our compliance with applicable laws and the applicable requirements of the Equity Distribution Agreement. The Equity Distribution Agreement also requires us to pay Goldman Sachs a commission equal to 3.25% of the aggregate gross proceeds of any shares sold through Goldman Sachs pursuant to the Equity Distribution Agreement. We intend to use the net proceeds, if any, from sales of common stock issued under the ATM Program for general corporate and working capital purposes. The timing of any sales and the number of shares sold, if any, will depend on a variety of factors to be determined and considered by us. We are not obligated to sell any shares under the Equity Distribution Agreement. As of June 29, 2024, no sales had been made under the Equity Distribution Agreement and the ATM Program’s full capacity remained available.

Previous wording

In 2024, our cash from operations could be affected by various risks and uncertainties, including, but not limited to, the risks detailed in Part I, Item 1A, “Risk Factors,” of our 2023 10-K and Part II, Item 1A, “Risk Factors” and “Note Regarding Forward-Looking Statements” included elsewhere in this report. In addition, inflation, high interest rates in certain geographic regions, overall economic conditions, concerns about the likelihood of a recession and hostilities in Eastern Europe and the Middle East, among other factors, have led to increased disruption and volatility in capital markets and credit markets generally, which could adversely affect our ability to access capital resources in the future and potentially harm our liquidity outlook.

Current wording

In the remainder of 2024, our cash from operations could be affected by various risks and uncertainties, including, but not limited to, the risks detailed in Part I, Item 1A, “Risk Factors,” of our 2023 10-K and Part II, Item 1A, “Risk Factors” and “Note Regarding Forward-Looking Statements” included elsewhere in this report. In addition, inflation, high interest rates in certain geographic regions, overall economic conditions, concerns about the likelihood of a recession and hostilities in Eastern Europe and the Middle East, among other factors, have led to increased disruption and volatility in capital markets and credit markets generally, which could adversely affect our ability to access capital resources in the future and potentially harm our liquidity outlook.

Previous wording

Our current business plan is to continue to reduce operating expenses and utilize inventory management to reduce working capital. To further reduce operating expenses, in the fourth quarter of 2023, we initiated our Global Operations Review, which involves narrowing our commercial focus to certain growth opportunities and accelerating activities that prioritize gross margin expansion and cash generation. These efforts have to date included, and may in the future include, the discontinuation of select product lines such as Beyond Meat Jerky; changes to our pricing architecture within certain channels including the recent and planned future price increases of certain of our products; accelerated, cash-accretive inventory reduction initiatives; further optimization of our manufacturing capacity and real estate footprint; and the continued review of our operations in China.

Current wording

Our current business plan is to continue to reduce operating expenses and utilize inventory management to reduce working capital. To further reduce operating expenses, in November 2023, we initiated our Global Operations Review, which involves narrowing our commercial focus to certain growth opportunities and accelerating activities that prioritize gross margin expansion and cash generation. These efforts have to date included, and may in the future include, the discontinuation of select product lines such as Beyond Meat Jerky; changes to our pricing architecture within certain channels including the recent price increases of certain of our products in our U.S. retail and foodservice channels; accelerated, cash-accretive inventory reduction initiatives; further optimization of our manufacturing capacity and real estate footprint; and the review of our operations in China.