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Beyond Meat Inc BYND

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No-Moat Beyond Meat Reports Sizzling Second Quarter Sales, but Shares Overheated

Analyst Note

| Rebecca Scheuneman, CFA |

No-moat Beyond Meat reported 69% sales growth in the second quarter, with sales to retailers (55% of year-ago quarter sales) up 192%, while food-service sales (45%) fell 59%, as the firm is heavily exposed to hard-hit full-service independent restaurants (70% of its mix compared with 30% quick-serve chains). We initially expected McDonald's would launch a Beyond Meat burger across its U.S. restaurants this summer, but we now think the launch is likely to occur next summer, once the coronvirus disruption has subsided. As McDonald’s executives have consistently said that a plant-based burger will be launched eventually, we remain confident the launch will occur, although the timing is admittedly difficult to pinpoint.

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Company Profile

Business Description

Beyond Meat is a provider of plant-based "meats," such as burgers (64% of 2019 sales), sausage (23%), ground beef (13%), and chicken. Unlike other vegetarian products, Beyond Meat seeks to replicate the look, cook, and taste of meat, is targeted to omnivores, 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 (outside of the U.S. and Canada) revenue represented 16% of 2019 sales. The firm’s products are available in retail stores and the food-service channel (on college campuses, and restaurants such as Carl’s Jr., Subway, Dunkin’ Donuts, A&W Canada, TGI Fridays, and Del Taco, with test markets for burgers at select McDonald’s and Hardee’s locations, and for boneless fried chicken at KFC).

Contact
119 Standard Street
El Segundo, CA, 90245
T +1 866 756-4112
Sector Consumer Defensive
Industry Packaged Foods
Most Recent Earnings Jun 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type Speculative Growth
Employees 472