Beyond Meat (BYND -0.17%) released fourth-quarter and full-year 2021 results after the market close on Thursday that didn't satisfy investors. Shares of the plant-based meat-substitute maker dropped 10.8% in Thursday's after-hours trading session.
The sell-off is attributable to fourth-quarter revenue and earnings falling short of the Wall Street consensus estimates and 2022 revenue guidance coming in lighter than analysts had been expecting.
Image source: Beyond Meat.
Beyond Meat's key quarterly numbers
|
Metric |
Q4 2021 |
Q4 2020 |
Change |
|---|---|---|---|
|
Revenue |
$100.7 million | $101.9 million | (1.2%) |
|
Operating income |
($77.7 million) | ($24.5 million) | N/A. Loss widened 216%. |
|
Net income |
($80.4 million) | ($25.1 million) | N/A. Loss widened 220%. |
|
Adjusted net income |
($80.4 million) | ($21.4 million) | N/A. Loss widened 276%. |
|
Earnings per share (EPS) |
($1.27) | ($0.40) | N/A. Loss widened 218%. |
| Adjusted EPS | ($1.27) | ($0.34) | N/A. Loss widened 274%. |
Data source: Beyond Meat. Adjusted figures exclude expenses attributable to the pandemic and other one-time items.
The quarter's gross margin was 14.1%, down from 24.9% in the year-ago period. Adjusted gross margin was also 14.1%, compared with 28.5% in the year-ago period.
For Q4, Wall Street was looking for an adjusted loss of $0.71 per share on revenue of $101.4 million. Beyond Meat missed both expectations. Its revenue result, however, landed within it own guidance range of $85 million to $110 million.
For the full year 2021, the company used $301.4 million in cash running its operations, compared with using $40 million in 2020. It ended the year with $733.3 million in cash and cash equivalents and total debt of $1.1 billion.
For context, in the third quarter, Beyond Meat's revenue rose 13% year over year to $106.4 million. Adjusted net loss widened 211% to $0.87. That result considerably missed the $0.39 per-share Wall Street consensus estimate.
Revenue breakdown
| Geographic Distribution Channel | Q4 2021 Revenue | Change (YOY) |
|---|---|---|
| U.S. retail | $50.0 million | (20%) |
| U.S. food service | $20.6 million | 35% |
| U.S. total | $70.6 million | (8.8%) |
| International retail | $14.3 million | 11% |
| International food service | $15.7 million | 36% |
| International total | $30.1 million | 23% |
| Total revenue | $100.7 million | (1.2%) |
Data source: Beyond Meat. YOY = year over year.
U.S. retail was the only category that had a revenue decline. But since this category is the largest of the four categories, by far, its performance has an outsize effect on the company's overall results.
"The decrease in U.S. retail channel net revenues primarily reflected softer demand, five fewer shipping days in the fourth quarter of 2021 compared to the year-ago period, increased trade discounts, and, to a lesser extent, loss of market share," the company said in the earnings release. [Emphasis mine -- topic is addressed at the end of article.]
What the CEO had to say
Here's much of what CEO Ethan Brown had to say in the earnings release:
In 2021 we saw strong growth in our international channel net revenues, as well as sporadic yet promising signs of a resumption of growth in U.S. foodservice channel net revenues as COVID-19 variants peaked and declined. These gains, however, were dampened by what we believe to be a temporary disruption in U.S. retail growth, for our brand and the broader category. ...
As we begin 2022, we are pleased with the progress we are making against our long-term strategy, such as the number of tests and core menu placements recently announced by our global QSR [quick-service restaurants] partners. Though we will continue to invest during 2022, we expect to substantially moderate the growth of our operating expenses as we leverage the building blocks we now have in place to serve our customers, consumers, and markets.
2022 revenue guidance is lighter than expected
For full-year 2022, management guided for revenue in the range of $560 million to $620 million, an increase of 21% to 33% year over year. Going into the release, Wall Street had been projecting 2022 annual revenue growth of 37%.
A disappointing report, but 2022 kicked off with good news
In short, Beyond Meat's fourth-quarter report was disappointing. Its 2022 revenue guidance was also somewhat disappointing, but it's likely that management is being quite conservative with the outlook.
Earlier this year, the company released good news on the big-name partnership front. "Beyond Meat and Kentucky Fried Chicken, which is owned by Yum! Brands (YUM 1.22%), announced the availability of plant-based Beyond Fried Chicken nuggets in KFC restaurants across the United States beginning on Jan. 10," as I wrote in my earnings preview. And McDonald's (MCD -0.05%) "announced that its plant-based burger, McPlant, would be available at approximately 600 U.S. locations in the San Francisco Bay and Dallas-Fort Worth areas starting on Feb. 14."
Investors need to pay close attention to what the company says about market share. The loss of market share was a minor factor in the U.S. retail-category's revenue decline. This may be a first for the company since it went public (2019), as I don't recall seeing a quarterly report involving the loss of market share.
