Beyond Meat “Beyond Burger” hamburgers made from vegetable substitutes for meat products are on a shelf for sale in New York City.
Angela Weiss | AFP | Getty Images
Beyond Meat announced on Thursday that it closed deals with fast-food giants McDonald’s and Yum Brands, causing stocks to rise more than 4% in the extended market.
The company separately reported a higher-than-expected quarterly loss, as the cost of global expansion and poor restaurant sales weighed heavily on business. The company’s shares initially fell 6% in prolonged trading with the earnings report, before turning positive, in the hope that new restaurant businesses will fuel growth.
Here’s what the company reported compared to what Wall Street expected, based on a survey of Refinitiv analysts:
- Loss per share: 34 cents adjusted against 13 cents expected
- Revenue: $ 101.9 million versus expected $ 103.2 million
The company said its fourth quarter fiscal loss of $ 25.1 million, or 40 cents per share, increased to a loss of $ 452,000, or 1 cent per share, a year earlier.
Excluding the expenses attributed to the pandemic, Beyond lost 34 cents per share, greater than the loss of 13 cents per share expected by analysts consulted by Refinitiv.
Liquid sales increased 3.5% to $ 101.9 million, losing expectations of $ 103.2 million. Grocery revenue in the United States increased 76% in the quarter, although the company has noted that retail demand has declined since the early stages of the crisis.
On the other hand, US food service revenue fell 42.6% during the fourth quarter, as the pandemic continued to weigh on restaurant demand for meat substitutes. But years-old partnerships with McDonald’s and Yum show that restaurant companies still believe that consumers want plant-based alternatives.
Under the new three-year deal with McDonald’s, Beyond will be the preferred supplier of McPlant hamburgers, which is being tested in some markets globally. McDonald’s and Beyond will also work together to develop new substitutes for pork, chicken and egg.
Likewise, Beyond and Yum will work together to make exclusive menu items for KFC, Taco Bell and Pizza Hut for years to come. The financial terms of both strategic partnerships were not disclosed.
Business also takes place as Beyond tries to position itself as a global player. Its international revenue fell 16.5% during the quarter, dragged by falls in its foodservice segment. The company noted that it spent more on expansion in Europe and China.
Other costs of the growing business include an increase in the number of employees as their workforce increases, spending more on marketing and development and investments in their information technology infrastructure.
Beyond Meat declined to provide a 2021 forecast, citing uncertainty caused by the pandemic.