Yahoo Finance's Julie Hyman and Brian Sozzi discuss Beyond Meat's announcement that it will lay off staff.
BRIAN SOZZI: All right, before we head to break, let's pull up shares of Beyond Meat as they are climbing on the Yahoo Finance trending ticker page. There wasn't much to like from the company's earnings release last night. Sales under pressure, profits under pressure. Now the company is laying off 4% of its workforce, Julie, but we've seen-- this is a remarkable reversal in Beyond Meat shares. This was not the initial reaction after that report. So a little more-- requires a little more digging, at least on my part here.
I want to call attention to what Beyond Meat's founder and CEO Ethan Brown talked about in the call. Essentially, consumers are trading down to just traditional hamburger meat or various meats from the still premium priced plant burgers or plant-based meats. And now they're having to lower prices in what is now becoming a challenging market. Hence, this not so great quarter from Beyond.
JULIE HYMAN: Yeah, and they haven't had-- we followed breathlessly for a while every time that Beyond got a new product in one of the fast food places. But none of those products has really been sticky and hasn't caught on. And in fact, during the quarter, the company said its net revenues for US food service fell by 2.4% because of a discontinuation with a, quote unquote, "certain customer," which was probably Dunkin', right? Because they didn't, I believe-- because they discontinued the--
BRIAN SOZZI: Or McDonald's, yeah.
JULIE HYMAN: --or they cut way down. In any case, they haven't had that killer product. So that has been an issue for the company here. And so-- and I saw some analyst commentary that the jerky is not really catching on either. When we see a pop like this after what appears to be pretty negative news, I kind of go digging around. The first place my brain usually goes is short interest. And about 37 and 1/2% of the share of the float sold short, so you could be seeing a short squeeze. But something has to go up a little bit for them to squeeze to happen. So a little confusing.
BRIAN SOZZI: There wasn't a lot-- yeah, there wasn't a lot encouraging, I would say, on the call. If anything, it looks like they have some more partnerships in the works with some fast food players. They did tease, I believe it was a fall launch of a new product, likely an updated burger from them. But maybe even the workforce, too, just the fact they are starting to cut costs. If you hit that buzzword, maybe you get rewarded, but.
JULIE HYMAN: You still got to sell more stuff, though.
BRIAN SOZZI: You gotta sell more stuff. Challenging quarter for that company and a lot--