Beyond Meat (NASDAQ:BYND), the leading maker of plant-based meat substitutes, reported strong first-quarter 2020 results after the market closed on Tuesday. 

Shares of the widely followed stock, which became publicly traded in May 2019, are up a whopping 18.9% at 11:56 a.m. EDT on Wednesday.  

We can attribute the stock's surge to revenue and earnings crushing Wall Street consensus estimates. Moreover, the company also posted a surprise profit, which surely delighted investors.  

Here's how the quarter worked out for Beyond Meat and its investors. 

A Beyond Burger with cheese, lettuce, tomato, and opinion sitting on a wood surface. esittebey

Image source: Beyond Meat.

Beyond Meat's key numbers

Metric

Q1 2020

Q1 2019 

Change

Revenue 

$97.1 million $40.2 million 141%

Operating income (loss)

$1.8 million  ($5.3 million) N/A (result flipped to positive from negative).

Net income

$1.8 million ($6.6 million)  N/A

Earnings per share 

$0.03 ($0.95)  N/A

Data source: Beyond Meat.

Wall Street was looking for a loss per share of $0.06 on revenue of $87.3 million, so Beyond Meat crushed both expectations. 

For context, in the fourth quarter of 2019, revenue soared 212% year over year to $98.5 million. Net loss narrowed significantly to $500,000, or $0.01 per share, from $7.5 million, or $1.10 per share, in the year-ago period. 

Channel and geographic performance

Geographic Distribution Channel  Q1 2020 Revenue Change (YOY)
U.S. retail  $49.9 million 157%
U.S. food service  $22.6 million 156%
U.S. total $72.6 million 156%
International retail  $6.0 million 4,944%
International food service  $18.6 million 57%
International total $24.5 million 106%
Total revenue $97.1 million 141%

Data source: Beyond Meat. YOY = year over year.

The company's Q1 revenue growth was due to an increase in volume sold, partly offset by a lower average price per pound. Volume growth was driven by an increase in the number of distribution outlets, higher sales at existing retail customers, and contribution from new products, the company said in the earnings release.

As widely expected, Beyond Meat's food-service sales were hurt in the last half of March due to the pandemic, as the dining areas of restaurants and other institutional dining operations around the world were largely closed. That said, sales were still very robust both in the U.S. and internationally, as the above numbers attest.

What management had to say

Here's what CEO Ethan Brown had to say in the earnings release:

I am proud of our first quarter financial results which exceeded our expectations despite an increasingly challenging operating environment due to the COVID-19 health crisis.

The health and safety of our employees and their families is our top priority and we have implemented a series of measures to minimize risks while supporting business continuity. ... During this unprecedented time, we remain steadfast in our resolve to continue to provide great-tasting plant-based meats to consumers, to solidify our support to our retail and foodservice customers, and to continue to lead the global plant-based meat movement.

2020 guidance suspended

Management pulled its previously issued 2020 guidance in light of the uncertainty surrounding the pandemic. This was to be expected, as most companies are doing the same.

For reference, Beyond Meat had guided for net revenue in the range of $490 million to $510 million, representing growth of 64% to 71% from 2019.

A meat shortage is poised to provide a tailwind 

Beyond Meat had a fantastic quarter. Investors have plenty of reason for optimism.

Granted, the company's food-service channel will probably continue to be hurt by the pandemic for some time. But the retail channel should continue to get a boost from the crisis.

Moreover, the pandemic has caused a major disruption in the meat supply chain, resulting in a shortage and rising prices. This presents a big opportunity for the company to win over customers who might not otherwise try meat substitutes.

As I said last quarter, investors should monitor Beyond Meat's competitors, as competition within the meat substitute industry is the company's main threat.