EL SEGUNDO, CALIF. — Shares of Beyond Meat, Inc. plummeted 22% on Oct. 28, despite strong third-quarter results that beat analysts’ expectations. The downward surge coincided with the expiration of a lockup period that restricted the selling of shares purchased prior to the company’s initial public offering.
Beyond Meat generated net income of $4,099,000, or 7c per share on the common stock, in the quarter ended Sept. 28, which compared with a loss of $9,342,000 in the prior-year period. Net revenues advanced 250% to $91,961,000 from $26,277,000.
The company’s stock price on the Nasdaq closed on Oct. 28 at $81.99, down 22% from $105.41 the day before and down 66% from a record high of $239.71 set in July.
The quarter marked the company’s first profitable period, with financial results that “outpaced our expectations,” said Ethan Brown, president and chief executive officer of Beyond Meat.
“And as a result of this growth and our outlook for the remainder of the year, we are raising our 2019 full-year financial outlook,” Mr. Brown said during an Oct. 28 earnings call.
Management now expects net revenues in the range of $265 million to $275 million, representing year-over-year growth of more than 200%, updated from the previous expectation of more than $240 million.
During the quarter, Beyond Meat expanded distribution to more than 58,000 retail and food service outlets globally and announced strategic partnerships with McDonald’s, KFC and Subway. Following a successful test of a Beyond Breakfast Sausage sandwich at Dunkin’, the chain’s more than 9,000 U.S. locations will serve the product beginning in November.
“Most recently, McDonald’s announced they’d be testing Beyond Meat to select locations in Southwestern Ontario, Canada, in their Plant, Lettuce and Tomato or P.L.T. Burger,” Mr. Brown said. “This important step reflects a dream becoming reality. We've long had our sights on ubiquitous availability for Beyond Meat.”
Beyond Meat products such as the Beyond Burger and Beyond Sausage are now available in 53 countries, Mr. Brown said.
“Moving forward, we will continue to grow our sales and operations footprint globally, applying the same aggressive pursuit of growth in international markets as we have here in the United States,” he added.
Several notable competitors have emerged in response to the success of Beyond Meat’s plant-based meat alternatives in the marketplace. Companies including Tyson Foods, Conagra Brands, Nestle and Kellogg Co. have introduced similar products in recent months. Mr. Brown said his company has not seen diminished interest or sales as a result of increased competition in the category.
“The competitive entrants are not a surprise nor a development we are not equipped to handle,” Mr. Brown said. “Business history, including recent business history, is replete with examples of companies that reset markets right before the eyes of incumbents. We do not interpret the interests and efforts of large companies to capture our leadership position as evidence that they will do so, any more than Amazon’s ascent was squelched by traditional retailers who entered e-commerce to unseat them. In fact, we have been preparing for a competitive market for years, and I look forward to continuing to execute on our strategy.
“As has been our practice, we intend to continue to invest in and innovate at an aggressive pace while maintaining our commitment to non-G.M.O. and simple plant-based ingredients to leverage our first-mover advantage here in the U.S. and abroad, including rapidly expanding customer relationships and production infrastructure to capture market share, and investing in marketing to articulate and amplify our story and value proposition to a broadening group of consumers.”