Shares of the widely followed action, which went public in May 2019, are down 7.6% as of 6:10 p.m. EDT after hours on Tuesday. We can probably attribute the stock’s fall in large part to earnings that “only” met the Wall Street consensus estimate. This is a highly regarded stock, so investor expectations are very high.
Additionally, investor optimism has likely been dampened somewhat by management’s comment on the earnings call that they expect the rest of the year to remain difficult due to the recent resurgence of cases of COVID-19 in parts of the United States.
Key figures of Beyond Meat
|Metric||T2 2020||T2 2019||Change|
|Returned||$ 113.3 million||$ 67.3 million||69%|
|Operating income||($ 8.2 million)||$ 2.2 million||N / A. (The result changed from positive to negative.)|
|Net revenue||($ 10.2 million)||($ 9.4 million)||N / A. (Loss widened by 9%.)|
|Adjusted net profit||(1,2 million de dollars)||($ 2.3 million)||N / A. (Loss decreased 48%.)|
|Earnings per share (EPS)||(0,16 USD)||(0,24 USD)||N / A. (Loss decreased by 33%.)|
|Adjusted EPS||(0,02 USD)||(0,05 USD)||N / A. (Loss decreased by 60%.)|
The revenue growth for the quarter was due to an increase in volume sold, partially offset by the drop in the net price per pound “driven by promotional activity intended to encourage greater consumer testing,” the company said in the statement. results.
Adjusted net loss and EPS exclude expenses attributable to the COVID-19 pandemic and early debt forgiveness.
Wall Street was chasing an adjusted loss per share of $ 0.02 on revenue of $ 99.8 million, so Beyond Meat easily exceeded top expectations and hit the bottom line estimate. .
For the background, in the first quarter, revenue climbed 141% year-over-year to $ 97.1 million, crushing Wall Street’s consensus estimate of $ 87.3 million. Earnings per share were $ 0.03, compared with a net loss per share of $ 0.95 for the prior year period. This profit was a pleasant surprise for many investors, as analysts had modeled a loss per share of $ 0.06.
Channel and geographic performance
|Geographic distribution channel||Q2 2020 revenue||Change (YOY)|
|Retail in the United States||$ 90.0 million||195%|
|American Food Service||$ 6.5 million||(61%)|
|US Total||$ 96.5 million||105%|
|International trade||$ 9.6 million||167%|
|International food service||$ 7.2 million||(57%)|
|Total international||$ 16.8 million||(17%)|
|Total income||$ 113.3 million||69%|
As widely expected, Beyond Meat’s foodservice sales have been significantly affected by the pandemic, which has resulted in the closure of many indoor dining rooms at restaurants and other catering operations. Retail sales continue to be influenced by the crisis, driven by the increase in the number of consumers eating at home.
The pandemic affected the entire quarter, while it only affected the last month (March) of the first quarter. It’s no surprise, then, that year-over-year revenue growth accelerated from the first quarter in the US retail channel, the company’s largest distribution category. In the first quarter, US retail revenues jumped 157% year over year. Likewise, it’s no surprise that year-over-year foodservice results (in the US and internationally) have deteriorated sequentially. In the first quarter, foodservice in both geographic categories increased year over year.
What management had to say
Here’s the gist of what CEO Ethan Brown had to say in the results release:
I am proud of our record net income and growth during a very difficult time. As the toll of the COVID-19 pandemic has gripped the restaurant industry, we have reused assets and repackaged and rerouted products to respond to increased consumer activity in the aisles of retail. Throughout the quarter, our brand experienced an enviable combination of consumer trends – increasing household penetration, increasing levels of purchase per household and strong repeat purchase rates of nearly 50%, well above the pass mark. consumer packaged products.
In addition, we continued our long-term growth strategy. We have invested in expanded operations and sales in the EU [European Union] and Asia, in innovation and targeted pricing measures during this period of high beef prices.
Forecasts for 2020 remain suspended
Last quarter, management withdrew its guidance for 2020 in light of the uncertainty surrounding the pandemic. He did not reissue an annual perspective for the same reason.
In short, the company had a good quarter and management remains optimistic about its long-term growth prospects. Admittedly, the stock fell back on Tuesday during the after-hours trading session. However, this is probably because investor expectations were unrealistic given the current macroeconomic environment.