By Jon Swartz
Beyond Meat Inc.’s stock initially tumbled 15% in extended trading Thursday after the company came up short on quarterly estimates. But exclusive deals with McDonald’s Corp. and Yum Brands Inc., announced just minutes after the earnings release, changed that quickly, sending Beyond shares up 11%, a swing of 26%.
By the middle of a conference call late Thursday, the stock had dipped 3%, presumably ending the roller-coaster ride.
The plant-based-protein company reported an adjusted net loss of $21.4 million, or 34 cents a share, compared with a net loss of $452,000, or a penny a share, in the year-ago quarter. In its earnings release, the company said “the surge in demand from retail customers that characterized the early stages of the pandemic as consumers abruptly shifted towards more at-home consumption has moderated.”
Revenue inched up 3.5% to $101.9 million from $98.5 million a year ago. Analysts surveyed by FactSet had expected a net loss of 14 cents a share on revenue of $103.6 million.
“Today was a very exciting day for us… with two outstanding partners [in McDonald’s and Yum!],” Beyond Meat Chief Executive Ethan Brown said during a conference call with analysts. Paraphrasing McDonald’s legendary Ray Kroc, Brown said, “There is something about being in the right place at the right time, and doing something about it. That is how we feel.”
The financial results initially sent shares of Beyond /zigman2/quotes/211617595/composite BYND +2.70% down 15% in extended trading Thursday.
Those shares dramatically rebounded, however, when Beyond later announced a three-year agreement with McDonald’s /zigman2/quotes/203508018/composite MCD +0.16% to be the fast-food chain’s preferred supplier for the patty in the McPlant, a new plant-based burger sandwich being tested in select McDonald’s markets globally. Additionally, Beyond Meat and McDonald’s will explore co-developing other plant-based menu items, including plant-based options for chicken, pork and egg as part of McDonald’s broader McPlant platform.
Another deal with Yum /zigman2/quotes/209029767/composite YUM +0.88% to co-create plant-based-protein menu items at KFC, Pizza Hut and Taco Bell over the next several years further boosted Beyond shares. By late Thursday, however, Beyond shares were down again.
Beyond is feeling the squeeze competitively from Impossible Foods Inc., which this month announced its third double-digit price-cut in less than a year — 20% off patties (to $5.49) and 12-ounce packages (to $6.99) in thousands of stores that include Kroger Co. /zigman2/quotes/206215053/composite KR -1.03% , Walmart Inc. /zigman2/quotes/207374728/composite WMT -0.31% , Publix Super Markets Inc., Safeway Inc., Sprouts Farmers Market Inc. /zigman2/quotes/209197151/composite SFM -0.04% , Target Corp. /zigman2/quotes/207799045/composite TGT -0.08% and Trader Joe’s.
Impossible’s aggressive pricing could complicate Beyond Meat’s efforts to turn turn its first annual profit since its IPO in 2019.
Beyond Meat’s shares temporarily surged in late January, following news that it had reached a deal to make snacks and beverages with PepsiCo. Inc. /zigman2/quotes/208744353/composite PEP +0.02% , but have since cooled. Beyond shares are up 27.8% over the past 12 months. The broader S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.33% has improved 22.9% in the past year.