Plant-based burger maker Beyond Meat beats forecasts in 1Q
Beyond Meat burgers -- patties made entirely of plants -- have seen a high level of success since being placed on the A&W menu. (Beyond Meat)
Beyond Meat went beyond expectations in its first earnings report since its stock market debut last month.
The plant-based meat maker's shares soared after it beat Wall Street's first quarter earnings and revenue forecasts. Beyond Meat also said it expects full-year revenue to hit $210 million this year, more than double its 2018 revenue and higher than the $205 million analysts had forecast, according to FactSet.
"We're being very conservative. I view this as a floor," President and CEO Ethan Brown said.
Beyond Meat's shares jumped 15% to $114.27 in after-hours trading.
The El Segundo, California-based company lost $6.6 million, or 95 cents per share, in the first quarter, up slightly from a 98-cent loss in the same period a year ago.
Adjusted for stock-based compensation costs and other items, the company lost 14 cents per share. That was better than the 15-cent loss analysts had forecast.
Beyond Meat reported revenue of $40.2 million, more than triple the prior year. That also beat Wall Street's forecast of $39 million.
Sales of frozen items dropped 5% in the January-March period after Beyond Meat took its frozen chicken tenders off the market. But sales of its fresh products -- burgers and sausages -- jumped 304%. Sales were about evenly split between groceries and restaurants.
Ten-year-old Beyond Meat burst into the spotlight last month with its IPO on Nasdaq. Its $25 opening share price jumped 163% in the first day of trading, the biggest first-day pop since 2015, according to Renaissance Capital. Beyond Meat is now valued at nearly $6 billion.
It's one of the biggest names in a growing category of vegan "meats" that are meant to appeal to both vegetarians and carnivores. Impossible Foods and Nestle -- which will launch a Sweet Earth-brand plant-based burger this fall -- are others.
In a conference call with analysts, Brown said he's not concerned about rivals because he thinks Beyond Meat's products are meeting customers demands. Beyond Meat's burgers and sausages are made from pea protein because customers didn't want to eat more soy or gluten, he said. He also stressed that they don't contain genetically modified ingredients -- a jab at Impossible Foods, which has genetically engineered yeast in its ingredient list.
"It is very, very hard to build products with the level of ingredient integrity that we have," Brown said.
Beyond Meat plans to expand into Europe and Asia, he said. Right now, the company makes all its products in Missouri and sells to 30,000 grocery stores, restaurants and schools in the U.S., Canada, Italy, the United Kingdom and Israel.
Last week, it announced a partnership with Dutch company Zandbergen World's Finest Meat. Zandbergen is expected to start making Beyond Meat products next year at a new facility in the Netherlands.
Brown also expressed confidence that the company can scale up quickly if it enters into further partnerships with restaurant chains. It currently sells Beyond Meat burgers and meat crumbles at Carl's Jr. and Del Taco and is testing sausages at Tim Hortons in Canada.
Brown said the company is in the testing phase with several fast-food chains, but he wouldn't say which ones. Burger King has paired up with Impossible Foods, but McDonald's is among those that could be looking for a partner.
Brown said Beyond Meat has the supply and manufacturing capability to meet demand from big fast-food chains, especially if restaurants are added gradually.
"It's nothing that would break our system," he said.