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The company had an impressive first quarter despite mounting operational challenges as a result of COVID-19.
Davina van Buren
May 11, 2020
3 Min Read
On Tuesday, May 5, Beyond Meat reported its first quarter 2020 financial results.
Long story short, the company is exceeding expectations. The first fiscal quarter, which ended March 28, showed impressive growth from the popular plant-based foods brand. Beyond Meat's initial public offering occurred May 2, 2019.
Data technology company SPINS reports that Beyond Meat is the No. 1 brand of refrigerated plant-based meat, with more than twice the dollar sales of its nearest competitor.
On an investor call and simultaneous webcast Tuesday afternoon, Beyond Meat executives reviewed the results in addition to discussing operational changes due to COVID-19 and an upcoming expansion into China. First quarter highlights include:
Net revenues increased 141% to $97.1 million in the first quarter of 2020, compared to $40.2 million in the first quarter of 2019.
Gross profit was $37.7 million (38.8% of net revenues), compared to gross profit of $10.8 million (26.8% of net revenues) in the year-ago period.
Net income was $1.8 million, or $0.03 per common diluted share, compared to net loss of $6.6 million, or $0.95 per common share, in the year-ago period.
Adjusted EBITDA, which is a non-GAAP financial measure, was $12.7 million compared to an Adjusted EBITDA loss of $2.1 million in the year-ago period.
“We are pleased with the company’s first quarter results, even as we began to navigate headwinds stemming from the COVID-19 pandemic late in the quarter,” said Chief Financial Officer Mark Nelson. “We maintained our solid top-line momentum while driving our best-ever performance in production unit cost per pound. Despite near-term challenges ahead stemming from the ongoing global health crisis, our improving operating results and continued strength of our balance sheet give us added confidence about the company’s long-term financial position.”
Improvements in first quarter operational income were driven by an increase in gross profit. However, profits were offset by higher administrative costs associated with being a public company, increased personnel levels, increased marketing initiatives, restructuring expenses, higher share-based compensation expense and investment in technological innovation.
In April executives announced the replacement of previously secured credit arrangements with a new $150 million five-year revolving credit facility. The new arrangement increases the company’s borrowing capacity, lowers its cost of capital and provides greater flexibility for global growth initiatives.
COVID-19 impacts operations
Executives also discussed company-wide changes due to COVID-19, including enhanced cleaning procedures and adherence to social distancing protocols in manufacturing facilities and offices whenever possible.
“I am proud of our first quarter financial results which exceeded our expectations despite an increasingly challenging operating environment due to the COVID-19 health crisis," said President and Chief Executive Officer Ethan Brown.
The company suspended its 2020 outlook (released on February 27) until further notice, citing ongoing uncertainty related to the pandemic.
Expanding in China
In April, the company announced a partnership with Starbucks to serve Beyond Meat products in its China locations. The launch marks its first foray into China, the world’s second-largest market for meat consumption behind the U.S.
Brown told CNBC the company also plans to open a manufacturing facility in Asia in the coming months, despite concerns surrounding the global COVID-19 pandemic.
“I made a commitment that we’re going to be producing in Asia by the end of this year,” he said. “We’ll do that regardless [of] this health epidemic occurring right now. We have to be active in China."
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