Beyond Meat posts first quarterly profit
Beyond Meat raised its sales outlook on Monday after recording better than expected revenues and its first ever quarterly profit, but the news was not enough to satisfy investors, who sent the shares lower in after-hours trading.
The purveyor of plant-based burgers, which has boosted sales through partnerships with major restaurant chains and retailers such as McDonald’s and Kroger, said it now expects to book net revenue of $265m to $275m for the full year — better than previous guidance of more than $240m and above analysts’ forecasts of $265m.
The increase comes after its net revenue more than tripled to $92m in the third quarter, above forecasts for $82m, thanks to higher sales volumes. Wider distribution fuelled its sales growth, along with stronger demand from existing customers, it said.
Beyond Meat has tapped into growing demand for plant-based foods as people look to limit or cut meat in their diets. But the group also faces increasing competition from rivals such as Impossible Foods, and established food companies including Nestlé and Tyson, who are developing their own meatless burgers and other products.
“I think it’s important that you learn from history and you learn what companies have done to stick around and beat the competition,” Ethan Brown, chief executive, said on a conference call with analysts. “They’re going to have to wrestle this from our hand. There is every intent here to remain the leader, and we think we have what it takes.”
In the quarter that ended in September, Beyond Meat posted net income of $4.1m, or 6 cents per share, beating the consensus estimate for a maiden profit of 3 cents. In the same quarter a year ago, it had a net loss of $9.3m, or $1.45 per share.
Beyond Meat has proved one of the most volatile stocks on the US market this year. Shares have surged more than 300 per cent since its initial public offering in May amid investor enthusiasm for the “fake meat” market, but the rapid ascent has also drawn the attention of short-sellers, who bet on a stock’s decline.
Having been down almost 11 per cent in the moments before the earnings were released, it rebounded somewhat afterwards, only to slip again to trade down 10 per cent. A lock-up — a period during which insiders and pre-IPO investors are restricted from selling shares — expires on Tuesday.