Beyond Meat expenses surge 124% to US$29M
Ballooning costs eclipse beat on revenue and raised forecast for full-year sales
Beyond Meat Inc’s expenses more than doubled in the third quarter as the vegan burger maker ramped up manufacturing to meet booming demand for plant-based proteins.
The firm’s shares fell eight per cent in aftermarket trading as the surge in expenses overshadowed a beat on quarterly revenue and a raised forecast for full-year sales.
Operating expenses surged 124 per cent to US$29 million in the three months ended Sept. 28.
It also represented a 42-per-cent jump from the second quarter.
The California-based company raised its full-year net revenue forecast for the second time to US$265 million to US$275 million. It had previously forecast net revenue to exceed US$240 million.
Consumers looking to switch to healthier diets have fuelled demand for faux meat alternatives, prompting restaurants like Carl’s Jr. and Yum! Brands’ KFC to rush to get Beyond Meat’s products on their menus.
Net revenue rose 250 per cent in the third quarter to US$91.96 million, above Wall Street’s estimate of US$82.2 million, according to Refinitiv IBES data.
The company’s shares have gained over fourfold in value since their May initial public offering price.
The IPO share lockup period expires on Tuesday.
Meanwhile, Beyond Meat has notched another win.
Denny’s Corp. said Monday it has started serving the meatless burgers at about 180 Los Angeles-area locations, and then at its more than 1,500 restaurants nationwide beginning in 2020.
In addition to a new menu item, guests can swap a Beyond patty into any other burger on the menu for an extra $2.
For Denny’s, the move is about offering more choices to draw additional foot traffic, said John Dillon, the company’s chief brand officer.
“Are we bringing in a different type of consumer? That’s what we’ll be watching for,” Dillon said.
The chain is looking to expand beyond its current customer base, hoping to appeal to younger, millennial and multicultural families, he said.
Beyond Meat’s main competitor, Impossible Foods Inc., snagged a big win earlier this year when its plant-based Whopper landed in some 7,000 U.S. Burger Kings.
But the real prize — a spot on Mcdonald’s Corp.’s U.S. menu — is still anyone’s game.
The fast-food giant selected Beyond Meat for a plant-based burger test in Canada but has yet to choose an alternative-meat supplier for its roughly 14,000 locations in its home market.