August 5, 2020

 

Beyond Meat reports higher quarterly sales, but shares drop

 

Beyond Meat said its quarterly sales were higher than analysts' estimates as more consumers purchased its plant-based meat offerings at retail during COVID-19 lockdowns, but shares fell 7% due to lower foodservice demand, Reuters reported.

 

The lower supplies and rising prices of poultry and other meats due to meat plant closures has benefitted the plant-based meat industry.

 

Beyond Meat said its retail sales in the United States was up nearly three times to US$90 million, while its international stores reported revenues up 167% to US$9.6 million. But the declining demand from restaurants meant the company spent more to shift production to retail, sending its shares down about 7% after the bell.

 

The higher revenue was also thanks to new value packs and discounts that Beyond Meat offered to US retailers.

 

Ethan Brown, Beyond Meat chief executive said soaring beef prices was an opportunity for the company.

 

Beyond Meat burgers are priced two times higher compared to regular beef burgers, but the new discounts meant that they were priced only 20% higher. These cheaper options were only available in retail for the last two weeks of the quarter but accounted for 16 percentage points of the company's US retail sales volume growth.

 

On the other hand, Beyond Meat's US foodservice business sales dropped 61%, along with 50% drop in revenue from international restaurants. Beyond Meat supplies plant-based burger patties, chicken and sausages to major fast-food restaurants like KFC and Dunkin Brands.

 

Pre-COVID-19, foodservice accounted for half of Beyond Meat's global sales, but many have closed stores or offered only limited menus during the quarter.The company spent US$6 million to shifted some of its foodservice assets and production towards retail to meet rising demand at Walmart and Costco.

 

Repurposing inventory for fast-food chains meant the company had to retrieve finished products from third party warehouses in the US, ship the products to its manufacturing facilities, then repackage and ship the now retail-friendly products to new warehouses.

 

Beyond Meat's net revenue increased 69% to US$113.3 million in the second quarter ended June 27. According to IBES data from Refinitiv, this was higher than analysts' US$99.73 million projection. However, the company reported a wider net loss of US$10.2 million compared to US$9.4 million the year prior.

 

-      Reuters