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Beyond Meat: Can new generation of products save the stock?

Plant-based food brand Beyond Meat (BYND) is scheduled to report fourth-quarter earnings next Tuesday, February 27. Yahoo Finance Executive Editor Brian Sozzi breaks down his conversation with CEO Ethan Brown and the meat substitute company's upcoming Beyond IV products — cutting down on fat and sodium counts — as it seeks to boost sales. Beyond Meat's stock has fallen nearly 60% over the past year.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

Video transcript

BRAD SMITH: We're looking at Beyond Meat shares down almost 60% in the last year. This comes as sales have fallen, expected to be down over 17% in its latest quarter. The alternative meats category sales are down over 33% from a year ago, according to recent data from Circana.


Now, Beyond Meat is introducing a new product line today. And could it be the company's saving grace? Our very own Brian Sozzi here with the inside scoop, or bite, on this one.

Sozzi, you spoke to Beyond CEO. What did he have to say? And is new meat going to save Beyond Meat?

BRIAN SOZZI: You guys are really putting me to work today, Brad. From chocolate to plant-based meat. So very interesting chat with Ethan Brown over at Beyond Meat. Making a big change on how their products are made, removing things like canola oil and coconut oil, and moving to avocado oil.

Sounds like a small change on paper, but it's not. What this essentially does-- and I have the bigger story on the "Yahoo Finance" home page now-- it is reducing fat counts and improving sodium, or just lessening sodium count in the products.

Now, these have been some of the highest-- I think, really, the area where critics have really hammered Beyond Meat and Impossible Foods and everybody that makes plant-based food because they don't necessarily have maybe the best or most robust nutritional aspects.

So, again, Beyond Meat pulling back on some of these higher fat ingredients. Also, reducing its ingredient list or the number of ingredients, which Ethan tells me should help improve the profitability of these items. Like you see on the screen, that is, in fact, the new ground beef. And you see it there.

For the first time, again, the American Heart Association award. But, guys, as you mentioned coming into this, this is a stock that has been really through the wringer. It came out of the gate. Really, robust IPO several years ago. It hit a high I think of $234.90. And how it has really crashed back down to Earth.

You have Impossible Foods delayed their IPO. And I think what Ethan is trying to get the point across is that this could be a reset moment for Beyond Meat and other companies. But I think the market needs to see this. Beyond Meat is going to report earnings next week, February 27. And this could be another challenging quarter of sales down double digits, and another loss.

I believe, the Street is expecting Beyond Meat to lose $0.88 a share based on "Yahoo Finance" data on our site.

SEANA SMITH: So what do you think the Street wants to see from Beyond Meat? Because like, you just said, and like you pointed out in your story, it certainly seems to be a reset moment for the company. They're doing everything they can to lure back some of the consumers that they lost, or doing everything they can to win the trust and belief here from investors.

Is more, though, needed do you think in order to get people back on board?

BRIAN SOZZI: I think Beyond Meat thinks this is the starting point of getting to stabilization. So I'm not going to sit here and say this one ground beef product, this one patty product is going to reignite sales growth from Beyond Meat overnight. I think the Street would just like to see stabilization, in part, because of a product like this.

Get this product to restaurant partners. This product will just launch at retail partners initially in the spring. And then maybe in the back half of this year, Beyond Meat returns to low single digit to high single digit percentage sales growth, and maybe turns a profit after reducing a large part of their workforce.

But, again, this remains a show me story in Beyond Meat. And I think a lot of folks next week-- I'll quickly add, when Beyond Meat reports, really keyed in on their balance sheet. The company ended the third quarter about $217 million in cash. They have some debt coming due in a couple of years.

I think the Street wants to see profits start to flow, the balance sheet improving so they can meet those debt obligations and get to a brighter day.

BRAD SMITH: Well, something that a lot of the customers are going to want to see and, perhaps, are getting here 20% less sodium than the previous version. That was a big hang up.

BRIAN SOZZI: It's a good thing.


BRIAN SOZZI: We don't need more salt. I'm not getting any younger, Brad.

BRAD SMITH: That was the hang up for the American Heart Association.

BRIAN SOZZI: I'm not trying to go in the grave--



BRAD SMITH: No. Sozzi, thanks so much for joining us here today discussing all things foods. Brian Sozzi here with us on set.