News

Beyond Meat reports strong second quarter

July 30, 2019

Beyond Meat, Inc., a provider of plant-based meat, reported net revenues increased 287%, gross profit jumped 33.8% as a percentage of net revenues while net loss was $9.4 million for the second quarter compared to the prior year.

The company's shares fell around 10% after it announced plans for a secondary offering of 3.25 million shares late Monday, according to a Marketwatch report.

"We are very pleased with our second quarter results which reflect continued strength across our business as evidenced by new foodservice partnerships, expanded distribution in domestic retail channels, and accelerating expansion in our international markets," Ethan Brown, president and chief executive officer, said in a press release announcing the second quarter results. "We believe our positive momentum continues to demonstrate mainstream consumers' growing desire for plant-based meat products both domestically and abroad." 

Net revenues increased 287% to $67.3 million in the second quarter of 2019 compared to $17.4 million in the second quarter of 2018. Growth in net revenues in the second quarter of 2019 was primarily due to an increase in sales volumes of products in the fresh platform across both retail and restaurant and foodservice channels, driven by expansion in the number of retail and foodservice points of distribution, including new strategic customers, international customers and greater demand from existing customers.

Gross profit was $22.7 million, or 33.8% as a percentage of net revenues, in the second quarter of 2019, compared to $2.6 million, or 15.0% as a percentage of net revenues, in the prior-year period. The increase in gross profit and gross margin was primarily due to an increase in the amount of products sold, resulting in operating leverage and production efficiency improvements. A greater proportion of gross revenues from the company's fresh platform also contributed to the improvement in gross margin.

Income from operations in the second quarter of 2019 was $2.2 million compared to loss from operations of $7.3 million in the second quarter of the prior year. This improvement was driven entirely by the year-over-year increase in net revenues and the resulting increase in gross profit, partially offset by higher operating expenses primarily due to higher absolute costs to support the company's expanded manufacturing and supply chain operations, higher administrative costs associated with being a public company and continued investment in innovation and marketing capabilities.

Net loss was $9.4 million in the second quarter of 2019 compared to a net loss of $7.4 million in the prior-year period. The expanded net loss was primarily the result of $11.7 million in non-cash expense associated with the remeasurement of warrant liability in connection with the initial public offering in May 2019.

Adjusted EBITDA was $6.9 million, or 10.2% as a percentage of net revenues, in the second quarter of 2019 compared to an adjusted EBITDA loss of $5.6 million in the second quarter of 2018. 

"We are pleased with the positive level of adjusted EBITDA we achieved in the second quarter," said Mark Nelson, CFO and treasurer. "The early benefits we are seeing on cost productivity across our supply chain and manufacturing network, in conjunction with solid demand through our customer partnerships, have helped deliver these strong gross margin and operating margin results."

For the full year 2019, the company is raising its guidance and now expects net revenues to exceed $240 million, an increase of greater than 170% compared to 2018, updated from its prior expectation of net revenues to exceed $210 million. It also expects adjusted EBITDA to be positive compared to prior expectations of break-even adjusted EBITDA.

The company's shares fell around 10% after it announced plans for a secondary offering of 3.25 million shares late Monday, according to a Marketwatch report.