Beyond Meat couldn't be happier that restaurants, arenas and other public eating sites are again opening to the public.
Just as the shutdown of foodservice cratered Beyond Meat's earnings in early 2020, the reopening is pushing revenue into the stratosphere.
"For Q2 2021 results, we generated record net revenues of $149 million, which came in toward the top of our guidance range for the quarter and represented a 32% increase year-over-year," CEO Ethan Brown said Thursday during the earnings call. "I am proud of this result as we cycled our previous best ever quarter in terms of sales, one where the defining feature was COVID induced stockpiling, as stay-at-home orders proliferated across the U.S. and globe."
Overall, net revenues increased 31.8% over Q2 2020. Brown pointed out that net revenues from foodservice increased 218% year over year and 61% compared with the first quarter of 2021. The increase in the U.S. was 269%, while overseas it was 172%.
In retail, net revenue increased 6% from Q2 2020, including a 14% decrease in U.S. retail sales as the quarter lapped the beginning of the pandemic when consumers loaded up on meat and staples.
"This comparison notwithstanding, our key brand metrics of household penetration, buyer rates, purchase frequency and repeat rates remain robust," Brown said.
Beyond Meat reported for Q2:
- Net revenues were $149.4 million, an increase of 31.8% year-over-year.
- Gross profit was $47.4 million, or gross margin of 31.7% of net revenues. In 2020, gross profit was $33.7 million and gross margin was 29.7% of net revenues.
- Net loss was $19.7 million compared with a net loss of $10.2 million a year ago. Per share, the loss was $0.31, compared with $0.16 per share in Q2 2020.
- Net loss as a percentage of net revenues was -13.2%.
- Adjusted EBITDA was a loss of $2.2 million, or -1.5% of net revenues.
During the third quarter, Beyond Meat expects net revenues to increase 27%-48%, to between $120 million and $140 million.
Phil Hardin, Beyond Meat's new chief financial officer and treasurer, pointed out that this year, Q3 ended one week later than it previously had, thus capturing pre-Independence Day sales. That difference did not make up for the 2020 surge of sales as the pandemic began, however. Across all channels, he said, net revenue was $5.69 per pound in Q2 and flat compared with 2020's Q2 revenue.
On the retail side, both domestic an international, the volume of products sold increased 9%, but revenue per pound fell 3% compared with the same period in 2020. The decrease was due to discounting, he said.
Brown reported that according to SPINS data, Beyond Meat continues to hold four of the top six product in its category, including the No. 1 spot, for the 12-week period that ended June 13. Total distribution points increased 55% because more retailers began selling Beyond products and new products such as Beyond Meatballs and Beyond Breakfast Sausage Links were introduced.
In foodservice, the volume of products sold increased 172% and net revenue per pound increased about 17% compared with a year ago, Hardin said. He expects the volume of sales to moderate during Q3, in part because last year's sales are difficult to beat. He also pointed out that Beyond Meat lost some distribution as Dunkin' (formerly Dunkin' Donuts) reduced its Beyond-related menu.
Brown explained, "We did see a significant reduction in distribution at Dunkin’ Brands, as they rationalize their menu, We remain engaged with Dunkin’ around future innovation and collaborations and our distribution throughout their Western U.S. stores." The breakfast sausage patties are selling well at other venues in the United States, and the company is in talks with an unidentified large, strategic quick-service restaurant, he added.