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Beyond Meat Inc BYND

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Despite Q1 Miss, No-Moat Beyond Meat’s Future Prospects Look Encouraging; Shares Look Compelling

Analyst Note

| Rebecca Scheuneman, CFA |

Beyond Meat’s first quarter sales grew 11% to $108 million, missing our $115 million mark and FactSet consensus of $113 million. Retail revenue grew 45% while food-service sales fell 34%. Even so, we now think our second-quarter $136 million sales target looks light, given Beyond’s April expansion into thousands of additional European retail locations, and the May U.S. retail launch of burger 3.0, the firm’s latest patty, which performs materially better in taste tests while cutting fat and calories. It will be supported by significant marketing support ahead of Memorial Day and the kick-off of the grilling season. Retail demand remains strong, with repeat rates rising to 57% in the quarter, well above the 20% rates typical of successful consumer products. Further, we think the increasing availability of vaccines will boost food-service demand, and we plan to increase our second-quarter sales estimate toward the midrange of management's $135 million-$150 million guidance.

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Company Profile

Business Description

Beyond Meat is a provider of plant-based meats, such as burgers, sausage, ground beef, and chicken. Unlike other vegetarian products, Beyond Meat seeks to replicate the look, cook, and taste of meat, is targeted to omnivores and vegetarians alike, and is sold in the meat case. The products are widely available across the U.S. and Canada and in 83 additional countries as well. International revenue represented 20% of 2020 sales. The firm’s products are available in retail stores and the food-service channel. In 2019, before the pandemic struck, sales were evenly split between these two channels, although mix changed to 74% retail/26% food service in 2020. We think the recovery from the crisis and new deals with McDonald's and Yum! Brands will return food-service sales to 45% by 2023.

Contact
119 Standard Street
El Segundo, CA, 90245
T +1 866 756-4112
Sector Consumer Defensive
Industry Packaged Foods
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type Speculative Growth
Employees 700

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