Quick Overview:

  • Plant-based meat alternative company Beyond Meat announced in a securities filing on Thursday that it has terminated the employment of its Chief Accounting Officer and Controller, Yi (Jevy) Luo. The company stated that Luo's last working day was Thursday, with the final day of employment being December 23. Effective Thursday, Beyond Meat's Chief Financial Officer, Lubi Kutua, will assume the duties of Chief Accounting Officer on an interim basis until a permanent successor is found. The company stated that Kutua will not receive additional compensation for the added responsibilities.
  • The termination comes about a month after the El Segundo, California-based company disclosed a material weakness in its internal control over financial reporting. According to a November 12 filing with the U.S. Securities and Exchange Commission (SEC), the weakness is related to the accounting for non-routine and complex transactions.
  • The filing shows that management determined there are currently insufficient technical resources to effectively identify and determine the appropriate accounting treatment for such transactions, involving areas such as compensation, debt, leases, and warrants.

In-Depth Analysis:

Beyond Meat had previously signaled the disclosure of this material weakness in a delayed filing notice submitted to the SEC on November 3, while also announcing a roughly one-week delay to its third-quarter earnings release. The delay was partly to quantify an expected non-cash impairment charge for the quarter ended September 27, related to certain long-lived assets.

The company is currently reviewing its internal controls to develop a remediation plan for the material weakness. To that end, Beyond Meat listed several adjustments it intends to implement in its November 12 filing, including allocating more resources to its accounting department, specifically by "hiring personnel with deep technical accounting and public company reporting knowledge and experience to ensure sufficient staffing to achieve accurate and timely financial reporting."

The company also plans to conduct new training for key accounting and finance personnel, engage external accounting consultants for support, strengthen the financial reporting review and approval process, and "implement a formal review process for all significant, unusual financial transactions."

The change in financial leadership marks the latest setback in a turbulent year for the plant-based meat supplier. Once a darling of the industry, the company's shares have fallen about 70% year-to-date amid declining demand for plant-based products and legal and corporate governance challenges.

In August, Food Dive, a sister publication of CFO Dive, reported that Beyond Meat was struggling to pay its bills on time amid ongoing sales declines. Citing data from Creditsafe, the report noted that the company's "days beyond terms" — the average time a company takes to pay its bills — had doubled year-over-year to 19 days.

At the time, media reports suggested the company could soon run out of cash. In a statement to Food Dive, a Beyond Meat corporate spokesperson said the company had no plans to file for bankruptcy, a statement also posted on its corporate X page.

After a 19% decline in second-quarter sales, Beyond Meat's third-quarter sales continued to fall, with gross profit nearly halving year-over-year to $7.2 million from $14.3 million in the same period last year. According to a November 10 press release, its operating expenses included a $77.4 million non-cash impairment charge "related to certain of the Company's long-lived assets."

Luo leaves the plant-based meat company after just over a year as its controller. According to his LinkedIn profile, he joined Beyond Meat in May 2024 from Herbalife, where he held the same position. Kutua — who previously worked at Jefferies, KeyBanc Capital Markets, and Goldman Sachs — joined the company in 2019 and has served as CFO since October 2022, according to his LinkedIn page.

Beyond Meat did not immediately respond to a request for comment.