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Beyond Meat “Beyond Burger” patties made from plant-based substitutes for meat products are on a shelf for sale in New York City.
Angela Weiss | AFP | Getty Images
Beyond Meat said on Thursday it had struck deals with fast food giants McDonald’s and Yum Brands, pushing shares up more than 4% under extended trading.
The company separately reported a larger-than-expected quarterly loss as the cost of global expansion and weak restaurant sales weighed on the business. Shares of the company initially fell 6% as part of extended trading on the earnings report before turning positive in hopes that new restaurant offerings will fuel growth.
Here’s what the company reported compared to what Wall Street expected, based on an analyst survey by Refinitiv:
- Loss per share: 34 cents adjusted against 13 cents expected
- Revenue: $ 101.9 million vs. $ 103.2 million forecast
The company said its net loss of $ 25.1 million, or 40 cents per share, in the fourth quarter of the fiscal year, extended to a loss of $ 452,000, or 1 cent per share, a year earlier.
Excluding spending attributed to the pandemic, Beyond lost 34 cents per share, more than the loss of 13 cents per share expected by analysts polled by Refinitiv.
Net sales rose 3.5% to $ 101.9 million, missing expectations of $ 103.2 million. U.S. grocery revenues climbed 76% in the quarter, although the company noted that retail demand had moderated since the early stages of the crisis.
In contrast, restaurant revenues in the United States fell 42.6% in the fourth quarter as the pandemic continued to weigh on restaurant demand for meat substitutes. But multi-year partnerships with McDonald’s and Yum show that restaurant companies still believe consumers want plant-based alternatives.
Under the new three-year deal with McDonald’s, Beyond will be the preferred patty supplier for its McPlant burger, which is being tested in select markets globally. McDonald’s and Beyond will also work together to develop new substitutes for pork, chicken and eggs.
Likewise, Beyond and Yum will work together to create exclusive menu items for KFC, Taco Bell, and Pizza Hut over the next several years. Financial terms of the two strategic partnerships were not disclosed.
The deals also come as Beyond attempts to position itself as a global player. Its international revenue fell 16.5% during the quarter, driven by the decline in its foodservice segment. The company noted that it was spending more to expand in Europe and China.
Other costs for the growing company included an increase in headcount as it expanded its workforce, increased spending on marketing and development, and investments in its information technology infrastructure.
Beyond Meat declined to provide an outlook for 2021, citing uncertainty caused by the pandemic.
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