Cultivated food

As operating expenses threaten profitability, what to expect from meat earnings

Beyond meat market

Beyond Meat (BYND) is set to report its fiscal second quarter results on Thursday after the bell as the company battles operational headwinds and weak margins.

Here’s what Wall Street expects, according to Bloomberg consensus estimates:

  • Revenue: $150.47 million
  • Adj. profit/loss per share: -$1.18 expected

Beyond Meat reported a wider-than-expected loss for its first quarter as the company’s plant-based jerky, created in partnership with PepsiCo (PEP), weighed heavily on margins.

meat

The jerky’s operational impact is widely expected to continue into the second quarter, leading to a greater estimated loss and yet another drag on margins.

The company’s reported gross margin came in at a mere 0.2% of revenue in Q1, falling sharply from the reported 30.2% it enjoyed in the year-ago quarter.

Beyond Meat has struggled to maintain its initial pace of growth with shares plummeting more than 70% over the past 12 months.

Analysts expect the plant-based meat maker’s sales and profits to remain volatile until it makes greater strides in containing operating expenses.

“The pursuit of growth opportunities such as jerky is creating operational inefficiencies and higher costs, burning through cash,” Bloomberg Intelligence analyst Jennifer Bartashus said in a new note, adding that “elevated supply-chain costs and production challenges may weigh on margins.”

She cautioned that the company’s focus on long-term growth initiatives may offset short-term wins and that consistent profitability may not arrive for several years with consensus estimates calling for annual losses through 2023.

Overall, although high-profile partnerships (like its recent collaboration with Kim Kardashian) will help the company stand out, it “needs to balance investment in growth strategies with progress toward sustainable profitability and long-term earnings.”

Source
Yahoo! finance

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