Beyond meat (NASDAQ: BYND), a leading maker of plant-based meat substitutes, is set to report its second-quarter 2022 results on Thursday, August 4, after the market close. An earnings call is scheduled for the same day at 5 p.m. ET.
Investors will likely approach the company’s upcoming report with caution. Last quarter, it missed Wall Street’s consensus earnings estimate, as it did in all four quarters of last year. Additionally, last quarter its revenue also fell short of analysts’ expectations, as has typically been the case since the early stages of the pandemic.
On the positive side, the second quarter will be the first full quarter in which the company’s revenue will benefit from its expanded partnerships with fast food giants. McDonald’s and Yum! Brands‘ Kentucky Fried Chicken.
In addition, the second quarter will also be the first full quarter in which the company’s Beyond Meat Jerky will be available at various retail outlets. This product was launched nationwide at the end of the first quarter (March 23). It is the first product co-developed by Beyond Meat and PepsiCo as part of their joint venture Planet Partnership.
Here’s what to watch in Beyond Meat’s upcoming Q2 report.
Image source: Getty Images.
Beyond Meat key figures
Here are the results for the prior year period and Wall Street estimates to use as benchmarks. Management has not issued quarterly guidance.
| Metric | Q2 2021 result | Wall Street consensus estimate for Q2 2022 | The Projected Change of Wall Street |
|---|---|---|---|
| Revenue | $149.4 million | $151.7 million | 1.5% |
| Adjusted earnings per share | ($0.31) | ($1.17) | The loss is expected to increase by 277% |
Data sources: Beyond Meat and Yahoo! Finance.
For context, Beyond Meat’s first-quarter revenue rose 1.2% year-over-year to $109.5 million, missing the $112.4 million forecast by analysts. Adjusted for one-time items, net loss was $100.5 million, or $1.58 per share, an increase of 276% over the prior year period. This result is well below the consensus estimate on Wall Street, which called for an adjusted loss of $1.01 per share.
Channel and geography performance
Here’s how distribution channels and geographic markets fared last quarter:
| Geographic distribution channel | Q1 2022 revenue | Change (YOY) |
|---|---|---|
| US retail | $68.3 million | 6.9% |
| American food service | $15.5 million | (7.5%) |
| US total | $83.8 million | 4% |
| International retail | $16.1 million | (6.2%) |
| International catering | $9.6 million | (8%) |
| International Total | $25.7 million | (6.9%) |
| Total income | $109.5 million | 1.2% |
Data Source: Beyond Meat. YOY = year after year.
The only reason revenue increased in the US retail channel was the introduction of a new product, Beyond Meat Jerky.
Last quarter’s anemic revenue growth was primarily driven by pricing. On average, the company made about 10% less for a pound of its product than a year ago. Overall sales volume increased 12% year over year.
The company attributed the price drop to “increased trade discounts, EU list price reductions, changes in sales mix and negative impacts on exchange rates”.
Beyond Meat is focused on getting consumers to try its products. Thus, he tried to keep his prices competitive with the products of others in his industry and as competitive as possible with meat products.
That said, it seems pretty clear that the company doesn’t have strong pricing power. This is concerning as the macroeconomic situation in the United States and much of the world looks set to deteriorate. High inflation is already pushing some consumers to cut their grocery bills. This dynamic is expected to intensify if the United States and other global economies enter recession.
Annual orientation
Any notable changes to Beyond Meat’s forecast for 2022 would likely move the stock.
For the year, management expects revenue in the range of $560 million to $620 million, an annual increase of 21% to 33% year over year. It did not release an earnings outlook.
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Beth McKenna has no position in the stocks mentioned. The Motley Fool holds positions and endorses Beyond Meat, Inc. The Motley Fool has a Disclosure Policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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