Beyond Meat drops 6% in the stock market despite an upbeat quarterly earnings report

Beyond Meat drops 6% in the stock market despite an upbeat quarterly earnings report
  • Beyond Meat drops 6% in the stock market despite an upbeat quarterly earnings report.
  • Beyond Meat records a massive 212% increase in net quarterly sales in Q4.
  • Beyond Meat posts $25.3 million in EBITDA (adjusted) versus $19.3 million in 2018’s Q4.

Beyond Meat announced its quarterly performance results on Thursday that beat analysts’ estimates for earnings and revenue. Failing to boast a 2nd consecutive profitable quarter, however, investors expressed their disappointment that manifested in the form of a 6% drop in its stock in after-hours trading.

Beyond Meat said that its Q4 net loss contracted to below half a million dollars (1 cent per share) versus $7.5 million in net loss ($1.10 per share) that was recorded in the same quarter last year. The previous quarter (Q3) marked the first time for the plant-based meat substitutes maker to boast a quarterly profit.  

Beyond Meat’s Net Quarterly Sales Gained 212% In Q4

The company also accentuated $25.3 million in EBITDA (adjusted) as compared to $19.3 million noted in 2018’s fourth quarter. At $98.5 million, it saw a massive 212% growth in net sales. Analysts had expected $79.5 million worth of net sales in the recent quarter.

59% of the company’s quarterly revenue was attributed to its sales to foodservice outlets and restaurants at large. Despite an excessive competition, Beyond Meat has so far struck a deal with giants like Denny’s, KFC, and McDonald’s. Starbucks also announced recently that its Canadian cafes are soon going to launch a breakfast sandwich that will use Beyond Meat’s plant-based substitutes.

But it is not uncommon for Beyond Meat’s products to make a temporary appearance on the restaurants’ menu. Tim Hortons, for example, removed the burgers and sausages made with the company’s plant-based meat substitutes from all of its Canadian cafes in January.  

Beyond Meat attributed 41% of its total sales to the grocery business. It further remarked that the entry of new players in the market didn’t push the company to expand discounts as much as previously expected.

Beyond Meat’s Guidance For Fiscal 2020

In its guidance for fiscal 2020, Beyond Meat said that it now expected to generate revenue between $490 million and $510 million. The forecast, as per the company’s executives, doesn’t account for KFC and McDonald’s driven revenue as the national restaurant chains are only trying its products regionally. On the earnings front, it estimated adjusted EBITDA to remain unchanged this year as it plans on widening investment on R&D, marketing, and international expansion.

On Thursday, Seth Goldman also announced that he will be exiting the role of Executive Chairman of Beyond Meat effective immediately and will take on the position of non-executive chairman.

Beyond Meat closed the last week at $91.23 per share in the stock market that marks an over 20% growth in 2020 so far.

By Michael Harris
Specialising in economics by academia, with a passion for financial trading, Michael Harris has been a regular contributor to Invezz. His passion has given him first hand experience of trading, while his writing means he understands the market forces and wider regulation.