Where is the Beef? Beyond Meet Does Not Need Any
Beyond meat during the last week of July released its financial results stating that the company posted revenues that nearly quadrupled year over year. Sales grew much fast than expected and the company increased its guidance for sales for the entire fiscal year. The company also revealed plans to sell more alternative meat products, as well as the dreaded secondary offering.
Beyond Meat reported that sales surged in the Q2 rising to 67.3 million compared to 17.3 million a year ago. This compared to expectations that revenues would come in at $53 million. The company also reported a Q2 loss of $9.4 million, or $0.24 a share. Earnings before interest, income taxes, amortization and depreciation, came in at a gain of $6.9 million. The growth in revenues was driven by the Beyond Burger which was introduced into several different fast good restaurants. The demand is now exceeding supply which led to the small loss experienced by the company in the Q2. The company also said that they have requested that their supplier of pea isolate, DuPont, rapidly increase the delivery of more pea protein.
Secondary Offering Hits the Stock
Despite the better than expected revenue numbers, shares sank after the company revealed that it plans to sell more shares in a secondary offering. Beyond Meat plans to sell an additional 3.25 million shares, with 3 million coming from selling stockholders. Secondary offerings happen often after IPOs, especially when shares are hot, and investors are concerned about a flood of sales after the end of the typical six-month lockup period. Beyond Meat’s lockup period ends on October 29, according to IPO filings. You can trade shares on an online forex trading platform.
Shares in the secondary offering will be broken down as follows. Approximately 30% of the 3 million shares offered will come from venture-capital shops Kleiner Perkins Caufield & Byers and Obvious Ventures, with Kleiner Perkins planning to sell about 600,000 shares and Obvious selling about 350,000 shares. Chief Executive Ethan Brown plans to sell about 39,000 shares, CFO Nelson will sell 55,530 shares, and employees not listed in the registration offering will sell more than 41,000 shares.
Guidance released by Beyond Meat was strong. The company increased total sales for the year to $240 million from $210 million. The company is expecting its Q2 and Q3 to be its strongest and is forecasting higher revenue in the third quarter. With increased demand due to the start of grilling season, executives said that the company has been faring much better than previous years. The $210 million, the company forecast last quarter was a number that did not include sales from restaurants that were only testing the product.
Since then, Tim Hortons has rolled out Beyond Meat’s imitation sausage and burgers to its stores in Canada. The company also nabbed a deal with Blue Apron. Dunkin’ has begun rolling out a breakfast sandwich made with Beyond Sausage. Sales from its Tim Hortons burger and the Dunkin’ sandwich is not included in the 2019 forecast yet.