Beyond Meat Income: Groundhog Day on a Quarterly Cycle
Beyond meat‘s (NASDAQ: BYND) fourth quarter results, released after market close on Thursday, recalled a quarterly version of the ’90s blockbuster movie groundhog day, in which the character of Bill Murray lives on the same day again and again.
Indeed, the leader in plant-based meat substitutes released fourth quarter results that closely mirrored its third quarter results: sluggish year-over-year revenue growth, with results below consensus estimates. of Wall Street.
The initial market reaction, however, was very different. Shares closed down just 0.9% in Thursday’s after-hours trading session. On the other hand, in the last quarter, the title plunged about 20% after the publication of the results.
The main reason? Immediately after releasing its fourth quarter results, Beyond Meat announced it has partnered with the king of fast food chains, Mcdonalds (NYSE: MCD), as well as another industry giant, Yum! Brands (NYSE: MIAM), which owns KFC, Taco Bell and Pizza Hut.
In 2021, the shares of Beyond Meat (which held its initial public offering in May 2019) are up 15% until Thursday’s regular trading session. The S&P 500 returned 2.2% over this period.
Let’s take a look at the results for the fourth quarter.
Beyond Meat Quarterly Key Figures
|$ 101.9 million||$ 98.5 million||3.5%|
|($ 24.5 million)||($ 927,000)||N / A. Loss widened 2.543%|
|($ 25.1 million)||($ 452,000)||N / A. Loss widened to 5.453%|
Adjusted net income
|($ 21.4 million)||($ 452,000)||N / A. Loss widened to 4.635%|
Earnings per share (EPS)
|($ 0.40)||($ 0.01)||N / A. Loss widened to 3,900%|
|Adjusted EPS||($ 0.34)||($ 0.01)||N / A. Loss widened to 3,300%|
Like with last quarter, revenue growth was driven by an increase in retail sales, which was more than offset by a decline in foodservice sales due to the impact of the COVID-19 pandemic. Promotional activities aimed at getting more new consumers to try Beyond Meat products also continued to hurt sales.
The company consumed $ 40.0 million of cash for its operations during the quarter, compared to $ 47.0 million in the prior year period. He ended the quarter (and year) with $ 159.1 million in cash and cash equivalents and total assets of $ 25.0 million.
|Geographic distribution channel||Q4 2020 revenue||Change (YOY)|
|Retail in the United States||$ 62.1 million||76%|
|American catering service||$ 15.3 million||(43%)|
|US Total||$ 77.4 million||25%|
|International retail||$ 13.0 million||139%|
|International catering||$ 11.6 million||(63%)|
|International total||$ 24.5 million||(33%)|
|Total income||$ 101.9 million||3.5%|
In a certain context, in the last quarter, the revenues of the US segment increased by 25% year-on-year. This is exactly the same as its performance in Q4, although both components in the segment have moved more in their respective opposite directions. In the third quarter, US retail sales grew 41%, while US foodservice sales fell 11% year-on-year.
In the third quarter, international segment revenue fell 46% year-over-year, with retail sales rising 27% and food service sales plummeting 65%.
What management had to say
Here’s some of what CEO Ethan Brown had to say in the results release:
I am proud of our 2020 accomplishments in light of the significant challenges we have faced, primarily in our restaurant chain, due to the COVID-19 pandemic. For the full year, we increased our total net revenues by 37% as sales to retail customers more than doubled from the previous year.
The fundamentals underpinning Beyond Meat’s long-term outlook remain strong, with important brand metrics such as household penetration, buyer rates, frequency of purchase and repeat rates all registering a further. quarter of uninterrupted growth.
Another anemic quarter, but great news on the partnership front
I will reiterate what I wrote last quarter:
Beyond Meat had a disappointing quarter. Certainly, COVID-19 is hurting results. … Nevertheless, people all over the world needed to eat during the [fourth] quarter – and Beyond Meat’s result suggests management didn’t do a great job of meeting consumers where they were at.
That said, long-term investors should keep in mind that a quarter is just a quarter and does not set a trend. The company remains the leader in a food niche that has significant growth potential.
Of course, the new partnerships are great news. This news could help push the title up, at least in the short term.
As part of the three-year global deal with McDonald’s, Beyond Meat will be the titan of fast food “preferred supplier for McPlant Galette, a new plant-based burger being tested in select McDonald’s markets around the world. In addition, Beyond Meat and McDonald’s will explore the joint development of other plant-based menu items, such as plant-based options for chicken, pork and eggs, ”according to the press release. (Emphasis added.)
As for the Yum! Partnering with the brands, the companies “will co-create and deliver compelling and innovative plant-based protein menu dishes that will only be found at KFC, Pizza Hut and Taco Bell for the next several years.”
Management did not provide advice, citing the lingering uncertainty surrounding the pandemic.
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