Beyond Meat is set to plunge 11% after losing more money than expected
- Beyond Meat reported second-quarter earnings Monday that showed the company lost more money than analysts expected.
- The plant-based meat alternatives company raised its full-year outlook for 2019 again.
- Shares tanked by as much as than 11% in premarket trading on the news.
- Watch Beyond Meat trade live on Markets Insider.
Beyond Meat did not fully live up to expectations for its second-quarter earnings.
Shares of the plant-based meat company plummeted more than 11% in Tuesday premarket trading after the newly public firm released its results. The company reported a wider loss than forecast, although it did generate more sales than expected.
The company also raised its full-year outlook for 2019. It now expects revenues to exceed $240 million and to be profitable by year-end.
Further, Beyond announced plans to sell more than 3 million additional shares — a move that will dilute the per-share value of existing units. Even amid the after-market losses, Beyond is still up roughly 800% since going public three months ago.
Here is what the company reported versus what analysts surveyed by Bloomberg had expected:
- Earnings per share: loss of $0.24 per share reported versus loss of $0.08 per share (expected)
- Revenue: $67.3 million reported versus $50.7 million (expected)
The revenue growth in the second quarter was due to increased sales volumes from the company's fresh platform and across both its retail and foodservice channels, according to a press release.
"Our positive momentum continues to demonstrate mainstream consumers' growing desire for plant-based meat products both domestically and abroad," said Ethan Brown, Beyond Meat's CEO, in a statement.
Beyond Meat raised its full-year outlook for 2019 as well, the second time it has increased its expectations. It now expects revenue to be more than $240 million for the year, representing growth of 170% from 2018. That's a boost from the guidance it released in the first quarter, when it expected 140% revenue growth for 2019.
The company also saw improved margins this quarter and reported improvement in both income from operations and gross profit in the second quarter. Gross profit was 33.8% of sales, up from 15% a year ago and more than the 26% consensus estimate. Adjusted EBITDA was $6.9 million, or 10.2% of new revenues, up from a loss of $5.6 million in the year prior.
"The early benefits we are seeing on cost productivity across our supply chain and manufacturing network, in conjunction with solid demand through our customer partnerships, have helped deliver these strong gross margin and operating margin results," said Mark Nelson, Beyond Meat's CFO and treasurer, in a statement.
The results were the second public earnings release for the company since its May IPO. Shares have risen more than 800% in that time and even broke the $200-a-share threshold on positive sentiment before earnings.
Demand for Beyond's products have continued to ramp up, contributing to the net-revenue increase of 287% from the second quarter of 2018, the company said.
The company has made strides in the last quarter, landing new deals with companies such as Dunkin' and Blue Apron. The company previously announced deals with Famous Dave's, Tim Hortons, Del Taco, and TGI Fridays.
Beyond is also looking to expand into new protein areas. It announced in June that it would release a new "ground beef" product. Bloomberg reported earlier this week that it is developing a plant-based bacon alternative but does not yet have a release date.
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