Notable Calls: Shopify, Beyond Meat and Facebook
Beyond Meat Inc.’s sales surpassed the highest analyst estimate in the second quarter as consumers eating at home snapped up the company’s substitute burgers and sausages from grocery aisles, countering a decline in sales at restaurants. Shares fell in late trading.
Net revenue increased 69 per cent rom a year earlier to US$113.3 million for the period ended June 27, the El Segundo, California-based company said in a statement Tuesday. Analysts had anticipated sales of US$99 million, according the average of estimates compiled by Bloomberg.
Beyond Meat is pivoting more aggressively to in-store sales as the pandemic shutters restaurants, which accounted for roughly half the plant-based meat seller’s business at the start of the year. Now, restaurants only make up about 12 per cent.
The speed of the change this year forced the company to repack products that were originally intended for the foodservice industry for retail sales -- at a cost of US$5.9 million. Chief Executive Ethan Brown said those repacking costs were the primary factor pulling down gross margins, which were 29.7 per cent of net revenues, compared to 33.8 per cent in the year prior.
“I don’t think there is going to be a fundamental shift in human behavior, ” Brown said in an interview. He expects restaurants to go back to normal when a vaccine for COVID-19 is developed, and in the meantime, the company is following growth -- and that’s coming in grocery stores.
Beyond Meat patty prices are about 20 per cent higher than beef on a per-pound basis, the company said. Brown said the company is on track to reach pricing parity in about three and a half years.