Will BYND report gross margin above 10% for Q1 2026?

Q1 is historically BYND's weakest quarter — Q1 2025 was -1.5%, the worst of 2025 by a wide margin. Q2 and Q3 2025 both exceeded 10% (11.5% and 10.3%), but Q1's low seasonal volumes compress margins most severely under the fixed-cost manufacturing structure. The $5.2M inventory provision was a one-time hit in Q1 2025, and without it underlying Q1 2025 margin was roughly 3-5% — still below 10%. With revenue declining 13-20% YoY, volume continues to work against fixed-cost absorption in Q1.

The committee confirms Q1 seasonal pattern at E2 evidence level with 2/2 analyst agreement. Q2 and Q3 2025 just barely crossed 10% (11.5% and 10.3%), and Q1 volumes are materially lower than mid-year quarters. Manufacturing consolidation from 13 co-packers to 2 internal facilities creates fixed-cost leverage that amplifies margin compression at declining volumes. AlixPartners engagement and transformation efforts may eventually help but are unlikely to produce visible Q1 results within 3-6 months.

Sequential deterioration from Q2 to Q3 (11.5% to 10.3%) suggests margin pressure is increasing, not decreasing. For Q1 2026, with further volume declines expected and fixed manufacturing costs, the structural floor for Q1 margins appears well below 10%. The unresolved debate about manufacturing consolidation as 'volume-dependency problem' vs 'fixed cost trap' resolves toward the bearish side for Q1 specifically, when volumes are at their seasonal lowest.

Q1 is the seasonal trough — last Q1 was negative (-1.5%). Mid-year quarters barely cleared 10%. Revenue is declining 13-20% YoY. Manufacturing is mostly fixed-cost now. The only scenario for YES is if Q4 2025 showed dramatic improvement continuing into Q1, or a one-time benefit like a provision reversal. No lens found evidence supporting margin recovery. The base rate from Q1 2025 and structural decline trajectory make >10% Q1 gross margin unlikely.

Q4 2024 to Q1 2025 sequential decline was 14.6 percentage points (13.1% to -1.5%). Even if Q4 2025 comes in around 10-12%, a seasonal decline of 5-8pp would put Q1 2026 at 2-7% — well below 10%. Committee unanimously rates operational execution as FAILING. Trade discounts are increasing as percentage of revenue, compressing margins further. AlixPartners engagement signals management recognizes the problem but transformation takes quarters, not weeks.

Steelmanning the YES case: if Q4 2025 margins surprise to the upside (14-15%) due to early restructuring benefits and reduced China depreciation charges, and Q1 2026 seasonal decline is moderated to 4-5pp instead of last year's 14.6pp, then Q1 2026 could theoretically reach 9-11%. But this requires multiple favorable assumptions stacking simultaneously. More likely scenario: Q4 2025 margins of 10-12% with Q1 seasonal decline producing 3-7% margins. Data vintage note acknowledges Q4 2025 is reporting today but results are not yet available.

Q1 2025 was -1.5%. Q1 is the weakest quarter. Revenue declining. Fixed costs high. All lenses negative on margin trajectory. Annual average margin is ~7%, and Q1 is structurally below the annual average. Probability of exceeding 10% in the weakest quarter is low.

Q2 (11.5%) and Q3 (10.3%) barely exceeded 10%. Q1 consistently underperforms other quarters. With declining volumes amplifying fixed-cost pressure, Q1 2026 is very unlikely to match mid-year performance. The downward trend from Q2 to Q3 (1.2pp decline) suggests even mid-year quarters are deteriorating.

Seasonal weakness is the dominant signal. Last Q1 was the only negative margin quarter. COGS per pound regressed higher in 2025. Revenue declining means fewer pounds to absorb fixed costs. No positive catalyst identified by any lens.