Beyond Meat “Beyond Burger” patties made from plant-based substitutes for meat products sit on a shelf for sale in New York City.
Angela Weiss | AFP | Getty Images
Beyond Meat on Thursday announced that it has struck deals with fast-food giants McDonald’s and Yum Brands, sending shares up more than 4% in extended trading.
The company separately reported a bigger-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% in extended trading on the earnings report before turning positive on the hopes that the new restaurant deals will fuel growth.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Loss per share: 34 cents adjusted vs. 13 cents expected
- Revenue: $101.9 million vs. $103.2 million expected
The company reported its fiscal fourth-quarter net loss of $25.1 million, or 40 cents per share, widened to a loss of $452,000, or 1 cent per share, a year earlier.
Excluding expenses attributed to the pandemic, Beyond lost 34 cents per share, wider than the loss of 13 cents per share expected by analysts surveyed 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 has moderated since the early stages of the crisis.
On the other hand, U.S. foodservice revenue tumbled 42.6% during the fourth quarter as the pandemic continued to weigh on restaurant demand for meat substitutes. But the years-long 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 some markets globally. McDonald’s and Beyond will also work together to develop new substitutes for pork, chicken and egg.
Likewise, Beyond and Yum will work together to make exclusive menu items for KFC, Taco Bell and Pizza Hut over the next several years. Financial terms for both strategic partnerships were not disclosed.
The deals also come as Beyond tries to position itself as a global player. Its international revenue fell 16.5% during the quarter, dragged down by declines in its foodservice segment. The company noted that it spent more on expanding in Europe and China.
Other costs of the growing business included an increased headcount as it adds to its workforce, spending more on marketing and development and investments in its information technology infrastructure.
Beyond Meat declined to provide an outlook for 2021, citing the uncertainty caused by the pandemic.