Beyond Meat, one of the best performing initial public offerings of the year, saw its shares rise even further into the stratosphere on Thursday, as its debut earnings as a listed company confirmed surging demand for its brand of expensive veggie burgers.
The company, already confident of doubling sales this year, said consumer interest in plant-based meat alternatives jumped in the first three months of the year and indicated Wall Street analysts should nudge up their full-year estimates.
Net revenues are on course to rise more than 140 per cent year-on-year to more than $210m in 2019, it estimated, which would be higher than the average of analysts’ expectations for $205m, according to a Refinitiv survey.
In the first quarter, revenues more than trebled to $40.2m, ahead of expectations for $38.93m. Revenues were driven primarily by a jump in sales of The Beyond Burger, which tastes and feels like meat but is made of yellow pea protein, vegetable starches and other ingredients.
Beyond Meat shares, which were already up 298 per cent from it May 1 IPO price as of Thursday’s close, jumped another 25 per cent in after-hours trading in the wake of the results. A little later they were up 15 per cent at $114. Its IPO price was $25.
In the first quarter, the company expanded its retail and restaurant partnerships as it saw greater demand from existing customers and drew in new ones, it said.
Just last week the company unveiled plans to expand production in Europe, with a deal to produce its plant-based meat alternatives at a new manufacturing facility being constructed in the Netherlands.
“We are very pleased with our successful IPO . . . and our strong first quarter financial results that we believe demonstrate mainstream consumers’ desire for plant-based meat products in the United States and internationally,” said Ethan Brown, chief executive.
The company’s net loss swelled to $6.6m as a result of higher operating expenses, up from a loss of $5.7m in the year-ago quarter. That translated to a loss of 95 cents a share, compared with 98 cents in the year-ago period.
Adjusting for one-time items the company reported a loss of 14 cents a share, compared with analysts’ forecasts for a loss of 15 cents.
Appetite for plant-based meat is growing and some analysts have projected a $100bn market over the next 15 years. Consumers have cited environmental and health concerns as reasons for their dietary shift away from meat to vegan or vegetarian foods.
However, competition is fierce as rival Impossible Foods has already struck a distribution deal with Burger King. Packaged goods company Nestlé has also launched meat-free burgers.
“We believe we are in the early stages of achieving the growth that Beyond Meat is capable of as we remain focused on efforts to increase brand awareness, expand our distribution channels, launch additional innovative products, and invest in our infrastructure and capacity to be able to serve a robust global market for plant-based meats,” said Mr Brown.
The company said it expected full-year adjusted earnings before interest, tax, depreciation and amortisation to be about break-even and did not provide guidance for net losses.