Beyond Meat (BYND 0.16%), the leading maker of plant-based meat substitutes, is slated to report its second quarter 2020 results on Tuesday, Aug. 4, after the market close. An earnings call is scheduled to follow at 4:30 p.m. EDT.
Investors are probably approaching the report with optimism and hoping for a repeat of the first quarter. In that quarter, the company crushed Wall Street's earnings estimate, resulting in the stock rocketing 26% higher the day after the release.
Last quarter, the COVID-19 pandemic hurt the company's foodservice distribution channel because of temporary restaurant closures; however, the crisis boosted sales in its retail channel. Many consumers stockpiled food, particularly sources of protein.
We can expect that a similar dynamic played out in the second quarter, though it should be more pronounced. In the first quarter, the pandemic's effect on demand was largely limited to just the last half of March.
In 2020, Beyond Meat stock is up 65.5% as of July 24, while the S&P 500 is barely above water, with a 0.6% return. Shares have gained a whopping 400% since the company's May 2019 initial public offering at $25 per share.
Image source: Beyond Meat.
Beyond Meat's key numbers
Here are the year-ago period's results and Wall Street's estimates to use as benchmarks.
| Metric |
Q2 2019 Result |
Q2 2020 Wall Street Consensus Estimate | Projected Change YOY |
|---|---|---|---|
| Revenue | $67.3 million | $99.1 million | 47% |
| Earnings per share (EPS) | ($0.24) | ($0.02) | Loss projected to narrow 92% |
Data sources: Beyond Meat and Yahoo! Finance. YOY = year over year.
For context, in the first quarter, Beyond Meat's revenue soared 141% to $97.1 million, easily topping the $87.3 million that analysts had been expecting. Earnings per share landed at $0.03, compared to a loss per share of $0.95 in the year-ago period. That result crushed the Wall Street estimate of a loss per share of $0.06.
The bottom-line performance was particularly impressive, given the company incurred expenses associated with keeping production employees as safe as possible from the novel coronavirus.
Channel and geographic performance
Here's how the distribution channels and geographic markets performed last quarter:
| Geographic Distribution Channel | Q1 2020 Revenue | Change YOY |
|---|---|---|
| U.S. retail | $49.9 million | 157% |
| U.S. foodservice* | $22.6 million | 156% |
| U.S. total | $72.6 million | 156% |
| International retail | $6.0 million | 4,944% |
| International foodservice* | $18.6 million | 57% |
| International total | $24.5 million | 106% |
| Total revenue | $97.1 million | 141% |
Data source: Beyond Meat. *Foodservice channel includes restaurants and traditional foodservice operations.
Last quarter, retail sales accounted for about 58% of total revenue. That number should increase in the second quarter since the pandemic likely continued to provide a headwind to overall foodservice sales and a tailwind to overall retail sales.
That said, the company's launch in China (which occurred in the foodservice channel) during the early part of the quarter should help counteract the headwind to international foodservice sales.
China performance
Management is likely to provide some color on how its partnership with coffeehouse giant Starbucks (SBUX 0.53%) in China is progressing.
As background, on April 20, Starbucks announced that it was introducing three Beyond Meat dishes to its menu in China starting on April 22. This partnership marked Beyond Meat's entrance into the Chinese market.
Guidance
Last quarter, the company pulled its 2020 guidance in light of the uncertainty surrounding the pandemic. Hopefully, on the earnings call, management at least provides some color on its outlook.
For 2020, Wall Street is now modeling for revenue of $460.8 million, representing growth of 55% year over year. Analysts also expect EPS of $0.14, compared to a loss per share of $0.29 last year.
