Beyond Meat (BYND) Q1 Earnings: What to Expect


What will it take for Beyond Meat (BYND) stock to finally pass the taste test? The plant-based meat giant has seen its stock plunge more than 40% year to date, including a decline of 61% and 20% in the respective six months and thirty days. Investors want to know if now is time to nibble on some shares. Ahead if its first quarter fiscal 2022 earnings results Wednesday, the market has seemingly given up on Beyond Meat’s ability to beef up its growth, especially when considering that the stock now trades lower than its first day of trading as an IPO. The stock’s decline has been due to a combination of factors. Aside from valuation concerns, the company is also dealing with wage inflation and supply chain shortages which has impacted its once torrid growth pace.

The market’s bearishness regarding emerging competitive threats has proved true. The company posted just 14% growth in 2021, down from 37% growth in 2020 and drastically below the 239% growth generated in 2019. What’s more, its gross margin has also come down considerably, declining to to 25.2%, down 490 basis points, while operating expenses grew by over 2,000 basis points. After the recent selling pressure, some analysts believe the stock is oversold. For that to be true, on Wednesday the company will need to outline what its growth potential looks like.

For the three months that ended March, Wall Street expects the El Segundo, Calif.-based company to lose 98 cents per share on revenue of $111.50 million. This compares to the year-ago quarter when the loss came to 42 cents per share on revenue of $108.16 million. For the full year, ending in December, the loss is expected to be $2.89 per share, while full-year revenue is expected to rise 26.7% year over year to $588.87 million.

Another factor that has impacted the company’s stock price recently is the decline in commercial traction, which has resulted in steepening losses. The company’s previous two quarters didn’t sustain the level of excitement and encourage consumer willingness to try meat substitute offerings at the grocery stores compared to the level of interest shown at the height of the pandemic. In the fourth quarter, there was a meaningful decline of 20% in retail sales in the core U.S. market.

The company, however, didn’t seem overly concerned. CEO Ethan Brown called it an aberration and predicted that consumer demand would pick up through the year. The market didn’t share the same level of the enthusiasm, however, particularly by the fact that inflation is also accelerating at the same time. Plus, the company has reported a miss on both the top and bottom lines in the quarter. Q4 revenue fell 1.2% in to $100.7 million, missing Street estimates by $1.25 million, yielding an adjusted loss of $1.27 which missed by 56 cents.

As noted, during the quarter, U.S retail segment revenue declined 19.5% to $50.0 million, which was offset by 35% rise in U.S. foodservice segment revenue. International revenue was up 22.6% to $30.1 million. While international growth was encouraging, the market anticipates some weakness as a result of the war between Russia and Ukraine. All told, this will be an important quarterly report for the company which has now seen how consumers have responded to its new product releases.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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