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Chick-News.com Poultry Industry News, Comments and more by Simon M. Shane

Beyond Meat Reports on Q3 2022

11/10/2022

In a press release dated November 9th Beyond Meat Inc. (BYND) announced results for the 3rd Quarter of FY 2022 ending October 1st. The Company disappointed on the top line with revenue of $82.5 million against a consensus of $93.6 million. The bottom line miss was a negative EPS of $1.60 against an expectation of a negative $1.15

 

The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as US$ x 1,000 except EPS)

 

2nd Quarter Ending

October 1st 2022

October 2nd 2021

Difference (%)

Sales:

$82,500

$106,432

-22.5

Gross profit:

$(14,840)

$22,976

-164.6

Operating income:

$(89,741)

$(53,998)

-66.2

Pre-tax Income

Net Income / (loss)

$(92,932)

$(101,678)

$(54,244)

$(54,816)

-71.5

-85.5

Diluted earnings per share:

$(1.60)

$(0.87)

-83.9

Gross Margin (%)

(17.9)

21.5

-183.3

Operating Margin (%)

(108.8)

(50.7)

-114.6

Profit Margin (%)

(123.2)

(51.5)

-139.2

Long-term Debt and lease obligations:

$1,192,655

$1,152,715

+3.5

12 Months Trailing:

Return on Assets (%)

-16

Return on Equity (%)

-1,167

Operating Margin (%)

-76

Profit Margin (%)

-86

Total Assets July 2nd.

$1,141,287

$1,379,399

-17.3

Market Capitalization November 10th/August 5th

$828,950

$2,160,000

-61.6

 

Notes for the 3rd Quarter derived from data presented:

SGA ’22 $55 million comprising 64% of sales compared to ’21 $56 million or 53% of sales

R&D ’22 $13 million comprising 16% of sales compared to ’21 at $15 million or 14% of sales

 

Inventory: In Q3’22 represented 299% of sales compared to 227% in Q3 2021

In Q3 ’22 17.4 million lbs. sold compared to 19.9 million lbs. in Q3 ‘21

In Q3 ’22 Unit revenue attained $4.74/lb. compared to $5.35/lb. in Q3 2021

In Q3 ’22 each of claimed 188,000 outlets received an average of 92.5 lbs. product compared to 128,000 outlets receiving 155lbs. in Q3 ‘21

In Q3 2022 U.S sales represented 75 percent of revenue of which 74 percent was retail, the remainder, food service.

In Q3 2022 International sales represented 25 percent of revenue of which 55 percent was retail, the remainder, food service.

52-Week Range in Share Price: $85.44 down to $11.56. 50-day Moving average $16.24

Forward P/E 666

 

In commenting on Q2 2022 results, Ethan Brown Founder and CEO stated, “As we shared last month, Beyond Meat is executing a full force pivot to a sustainable growth model, emphasizing the achievement of cash flow positive operations within the second half of 2023. This transition is designed to fortify our business in the near-term as record inflation continues to pose a challenge for our brand and category, positioning Beyond Meat to endure and advance toward our long-term objective of being a major protein provider within the $1.4 trillion meat industry.”

 

Brown continued, “Though this quarter’s results are disappointing, with a sharp decline in revenues and associated knock-on effects across the income statement including gross margin driven by a challenging macro environment, we are implementing aggressive measures with urgency to positively impact our near-term operations. Our path forward comprises three key actions: significant reduction of our operating expenses; intensified focus on cash flow accretive inventory management activities; and sales and marketing programs that are tightly focused on opportunities and segments that strike the right balance between near-term growth and our most valuable long-term opportunities. We are focusing on the key drivers of our business and are committed to sharing our progress toward delivering them over the coming quarters.”

The report incorporated commentary on the third quarter that included:-

 

“The decrease in net revenue per pound was primarily attributable to strategic but limited price reductions in the U.S. and broader list price reductions in the EU implemented in the first quarter of 2022, increased trade discounts and unfavorable changes in foreign exchange rates. U.S. retail channel net revenues decreased 11.8% compared to the year-ago period primarily driven by an 11.8% decrease in pounds sold with net revenue per pound staying flat. U.S. foodservice channel net revenues increased 5.6% compared to the year-ago period primarily driven by a 32.2% increase in pounds sold, partially offset by lower net revenue per pound. The decrease in net revenue per pound was primarily due to changes in sales mix and, to a lesser extent, higher trade discounts. International retail channel net revenues decreased 52.3% compared to the year-ago period primarily driven by a 37.0% decrease in pounds sold and a 24.4% decrease in net revenue per pound. The decrease in net revenue per pound was primarily due to list price reductions in the EU implemented in the first quarter of 2022, unfavorable foreign exchange rate impact, changes in sales mix and increased trade discounts. International foodservice channel net revenues decreased 42.2%”

 

Guidance for 2022 included revenue of $400 to $425 Million

 

The reality is that the Company record includes:-

  • An accumulated deficit of $676.4 million.
  • Effective October 30th6 percent of float was short
  • News reports of mismanagement, departures from the C-Suite, failure to execute and deliver on products offered to food service prospects
  • Announced reduction of 19 percent in workforce.
  • Share price off 83.1 percent year-to-date compared to a decline of 21 percent for the S&P Index

 

BYND closed November 9th post release at $11.63 and closed inexplicably up 18% at $38.26. After Q2 results were released on August 4th David Trainer speaking on CNBC correctly pointed to flagging sales and losses recorded among the diverse manufacturers of vegetable protein with extreme competition in the market. (see Report on Maple Leaf Foods Q3 in this edition). Analysts see Beyond Meat running out of cash with a share price below $5. This will create an opportunity for a Grey or even a Black knight (the White knights have passed it over) to acquire and dismember the Company. Tyson Foods correctly assessed the prospects for Beyond Meat when they disposed of their equity before the IPO.


 
Copyright © 2022 Simon M. Shane