Beyond meat There was a loss on Monday in the third quarter after the coronavirus pandemic weakened demand for meat alternatives in restaurants.
CEO Ethan Brown said part of the blame for its lackluster results is consumer stockpiling. The panic buying at the start of the crisis boosted Beyond’s grocery sales in the previous quarter, but as the pandemic stretched into the fall, the trend stabilized.
The company’s shares fell 27% in after-hours trading, ending an already busy day for the stock. The shares were stopped twice on the Monday following the announcement MC Donalds added vegetable elements to his menu.
The company reported, versus Wall Street’s expectations based on an analyst survey by Refinitiv:
- Loss per share: 28 cents, adjusted, compared to an expected profit of 5 cents per share
- Revenue: $ 94.4 million versus $ 132.8 million expected
For the third quarter ended September 26, Beyond reported a net loss of $ 19.3 million, or 31 cents per share, compared to net income of $ 4.1 million, or 7 cents per share, last year. The company spent $ 700,000 repackaging grocery store items and $ 1.1 million on write-downs on unsalable foodservice inventory.
Excluding the $ 1.8 million cost related to the pandemic and other factors, the company lost 28 cents per share and missed earnings of 5 cents per share that Refinitiv surveyed analysts said.
Net sales rose 2.7% to $ 94.4 million, falling short of expectations of $ 132.8 million. Sales in the US food services segment, which includes restaurants, corporate catering and universities, declined 11% in the quarter.
Brown said that there are “strong indications that certain are big [quick-service restaurants] plan menu expansions, “but declined to provide further details due to the uncertainty caused by the pandemic. Fast food restaurants that have recovered much faster from the crisis account for about a third of Beyond’s foodservice sales.
When asked about working with McDonald’s, Brown said he respected the chain’s decision to refer to the McPlant line “generically”. He also paraphrased the famous quote from writer Mark Twain about the rumors that his death was grossly exaggerated.
“Our relationship with McDonald’s is really good, it’s really strong,” said Brown.
But he said he would oppose McDonald’s efforts to remove the Beyond Meat trademark from all products made by the meat alternative maker. Brown told analysts it would be in everyone’s best interests.
U.S. grocery sales rose 40.5%, but could barely offset lower demand for restaurants. Brown told analysts on the conference call that food manufacturers saw similar patterns in other categories after initial inventory impacted their third quarter.
Brown also announced that Beyond products would be sold at CVS locations.
The company is also expanding rapidly outside of the United States. In September it was agreed to set up two factories near Shanghai in order to establish a larger presence in China. International sales declined 45% for the quarter, negatively impacted by a 65% decline in food service sales.
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