Beyond Meat shares soar as group ups guidance, tops revenues estimates

Beyond Meat shares soar as group ups guidance, tops revenues estimates

Beyond Meat shares soar as group ups guidance, tops revenues estimates

"I don't see any material obstacle, and I don't see any manufacturing obstacle to being able to, in the appropriate amount of time and the right structure, take on numerous largest QSRs out there", CEO Ethan Brown told analysts on the company's first earnings conference call. Analysts had expected sales of $38.9 million. That also beat Wall Street's forecast of $39 million.

Restaurant chains' growing enthusiasm for plant-based meat products can be seen in Beyond Meat's finances and its stock price.

Beyond Meat just reported its first earnings since becoming a publicly traded company, exceeding investors' expectations, with shares jumping as high as 23% in after-hours trading.

Beyond Meat plans to expand into Europe and Asia, he said.

Beyond Meat, whose rivals include US -based Impossible Foods, is likely to face increasing competition in the niche market as companies like Nestlé and Tyson Foods ready their own line of products.

With McDonald's and Yum Brands' KFC restaurants likely to test plant-based meat products this year, the Beyond Meat's revenue outlook is highly likely to tick higher. California's Gelson's Market told Reuters that when placed in the freezer section, Beyond Meat didn't sell well, but since being moved to the vegan section, sales of the product are up 60%.

At the 35 Kings Food Markets and Balducci's Food Lover's Markets across New York, New Jersey, Connecticut and the Washington D.C. area, Beyond Meat products are sold both in the dairy and meat section.

Beyond Meat said growth in total Q1 2019 net revenues was driven primarily by an increase in sales of The Beyond Burger, the expansion in the number of retail and foodservice outlets, and stronger demand from existing customers. To put that into perspective, revenue previous year was all of US$88 million.

But Brown is not cowed by rivals, he said. "We have contracts in place now for protein that are in excess of" our forecast.

The burgers, a hit with consumers switching to a "flexitarian" diet, feel, smell and taste like real meat. That is about to change. While the product is vegan and vegetarian, the company isn't marketing itself that way because it wants to attract a broader customer base, including those who eat animal-based protein.

Brown said the company is in the testing phase with several fast-food chains but did not say which ones. Sales climbed 42% between March 2016 and March 2019 to $888 million, Nielsen figures cited by the AP show. If Beyond supplies meatless patties to McDonald's, he said, the company's value would grow. In 2018, Beyond Meat controlled only 2.1 percent of the US meat alternative market.

To be sure, the market for plant-based meats is strong so it's possible that there is enough growth to go around even if multiple companies are in the space. It was the first offering to soar by more than 100% in its first trading day this year, according to Dealogic, coming amid a slew of mixed new stock-market debuts.

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