Beyond Meat (BYND -5.80%), a leading maker of plant-based meat substitutes, is slated to report its second-quarter 2022 results on Thursday, Aug. 4, after the market close. An earnings call is scheduled for the same day at 5 p.m. ET.
Investors will probably be approaching 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. Moreover, last quarter its revenue also fell short of the analyst expectation, as has generally been the case since the earlier 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 is available at various retail outlets. This product launched nationwide at the tail end of the first quarter (March 23). It's the first product co-developed by Beyond Meat and PepsiCo as part of their Planet Partnership joint venture.
Here's what to watch in Beyond Meat's upcoming Q2 report.
Beyond Meat's key numbers
Here are the year-ago period's results, and Wall Street's estimates to use as benchmarks. Management didn't issue quarterly guidance.
|Metric||Q2 2021 Result||Wall Street's Q2 2022 Consensus Estimate||Wall Street's Projected Change|
|Revenue||$149.4 million||$151.7 million||1.5%|
|Adjusted earnings per share||($0.31)||($1.17)||Loss expected to widen 277%|
For context, in the first quarter, Beyond Meat's revenue inched up 1.2% year over year to $109.5 million, missing the $112.4 million analysts had projected. Adjusted for one-time items, net loss was $100.5 million, or $1.58 per share, a 276% widening from the year-ago period. That result fell quite short of Wall Street's consensus estimate, which was for an adjusted loss of $1.01 per share.
Channel and geographic performance
Here's how the distribution channels and geographic markets performed last quarter:
|Geographic Distribution Channel||Q1 2022 Revenue||Change (YOY)|
|U.S. retail||$68.3 million||6.9%|
|U.S. food service||$15.5 million||(7.5%)|
|U.S. total||$83.8 million||4%|
|International retail||$16.1 million||(6.2%)|
|International food service||$9.6 million||(8%)|
|International total||$25.7 million||(6.9%)|
|Total revenue||$109.5 million||1.2%|
The only reason revenue grew in the U.S. retail channel was the introduction of a new product, Beyond Meat Jerky.
Last quarter's anemic revenue growth was primarily due to pricing. On average, the company realized about 10% less for a pound of its product than it did in the year-ago period. Overall sales volume grew 12% year over year.
The company attributed this pricing decline to "increased trade discounts, list price reductions in the EU, changes in sales mix, and negative foreign exchange rate impacts."
Beyond Meat has been focused on enticing consumers to try its products. So, it's been trying to keep its prices competitive with the products of others in its industry and as competitive as possible with meat products.
That said, it seems pretty clear that the company lacks strong pricing power. This is concerning because the macroeconomic picture in the U.S. and much of the world seems poised to worsen. High inflation is already causing some consumers to trim their grocery bills. This dynamic should increase if the U.S. and other world economies slip into recessions.
Any notable changes to Beyond Meat's 2022 guidance 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 issue an earnings outlook.