Beyond Meat Inc (BYND)

[John-Knee]

Beyond Meat Swings to Loss in Second Quarter as Expenses, Costs Incurred to Grow Business Eats into Record Revenue
2020-08-05 05:11:11 AM ET (MT Newswires)
   
   
05:11 AM EDT, 08/05/2020 (MT Newswires) -- Beyond Meat (BYND) said revenue hit a record in the second quarter amid increased volume in the US retail channel but it still reported a loss as the company continued to invest in marketing and international expansion to push adoption and uptake of its novel vegetarian food that tastes and smells like a non-vegetarian meal.

Net revenue increased to $113.3 million during the three months that ended June 27 from $67.3 million a year ago, beating the $99.4 million average analyst estimate compiled by Capital IQ. Net sales grew primarily because of higher volumes but were partially offset by lower net price per pound given the expenditure on promotional activity, the company, which sells refrigerated plant-based meat, said in a statement.

Increased distribution both domestically and abroad as well as higher sales velocities at existing retail customers helped lift the volumes. That pushed up sales in the dominant US retail channel, which accounts for a vast majority of group revenue and helped offset lower sales from foodservice customers hit by the COVID-19 pandemic.

"As the toll of the COVID-19 pandemic took hold across the foodservice industry, we repurposed assets and repacked and rerouted products to meet increased consumer activity in the retail aisles," Chief Executive Ethan Brown said. "We invested in expanded operations and sales in the European Union and Asia, in innovation, and in targeted pricing measures during this period of high beef prices."

The California-based company founded in 2009 swung to a loss in the second quarter compared with earnings of $0.05 a year earlier. Still, its adjusted loss per diluted share of $0.02 was in line with the consensus.

The firm said selling, general and administrative expenses more than doubled due to increased headcount, marketing activities, and investment in international expansion initiatives. Costs, including those related to repackaging amid the health crisis, were up by almost 100% in the second quarter.

While many of its foodservice customers have reopened, the company pointed out most were operating under various local restrictions and continue to navigate a highly uncertain environment.

"Given the uncertainty regarding the ultimate duration, magnitude, and effects of the COVID-19 pandemic, management remains unable to predict the continuing impact on its business with reasonable certainty," the company. "As such, the 2020 outlook, previously provided on Feb. 27, remains suspended."