Beyond Meat Tumbles On Big Miss, Then Surges On Strategic Partnerships With McDonalds, Yum!

Beyond Meat Tumbles On Big Miss, Then Surges On Strategic Partnerships With McDonalds, Yum!

After a painful day for everyone in the markets, Beyond Meat investors, both longs and shorts, suffered a rollercoaster ride after hours when first BYND tumbled after the company’s latest disappointing results spooked bulls, only to see the stock reverse and spike when the company announced a strategic partnership with both McDonalds and Yum Brands.

First, here are the disappointing numbers the company reported for Q4:

  • Net revenue $101.9 million, missing the estimate of $103.6 million  (of this U.S. net revenue was $77.4 million, and international revenue $24.5 million)
  • Adjusted loss per share 34c, missing the estimate loss/share 14c (range loss/share 28c to EPS 2.0c)
  • Adjusted Ebitda loss $9.5 million, missing the estimate profit $0.87 million
  • Gross margin 24.9%, missing estimate 31.0%
  • Cash and cash equivalents $159.1 million, missing the estimate $223.6 million

And then, the proverbial cherry on top, the company advised investors that “given that the ongoing evolution of consumer demand patterns across retail and foodservice channels has significantly increased the difficulty in forecasting the Company’s customer demand levels, management will not be providing 2021 guidance until further notice.”

The initial news of the company’ ghaslty earnings – and guidance pull – sent the stock plunging as much as $20, down to $127.5 after hours. However, the stock then promptly reversed when the company surprised bears with two new strategic partnerships moments after reporting earnings, one with McDonalds and another with Yum! Brands. Here are some more details on the McDonalds deal:

  • Beyond Meat today announced the establishment of a three-year global strategic agreement with McDonald’s Corporation. As part of the agreement, Beyond Meat® will be McDonald’s preferred supplier for the patty in the McPlant®, a new plant-based burger being tested in select McDonald’s markets globally. In addition, Beyond Meat and McDonald’s will explore co-developing other plant-based menu items – like plant-based options for chicken, pork and egg – as part of McDonald’s broader McPlant platform.
  • The agreement will bring together McDonald’s iconic global brand with Beyond Meat’s leading expertise in plant-based protein development to create and market innovative new plant-based menu offerings. This announcement further solidifies the relationship between McDonald’s and Beyond Meat, which began in 2019 with the Canadian test of a sandwich made with Beyond Meat’s plant-based patty.
  • “Our new McPlant platform is all about giving customers more choices when they visit McDonald’s,” said Francesca DeBiase, McDonald’s Executive Vice President and Chief Supply Chain Officer. “We’re excited to work with Beyond Meat to drive innovation in this space, and entering into this strategic agreement is an important step on our journey to bring delicious, high quality, plant-based menu items to our customers.”

… and then just to make sure everyone is sufficiently distracted from its dismal earnings and guidance pull, BYND also announced a new global partnership with Yum! Brands (i.e., KFC, Pizza Hut and Taco Bell), “to co-create and offer craveable and innovative plant-based protein menu items”:

Beyond Meat, Inc. today announced a global strategic partnership with Yum! Brands (NYSE: YUM) to co-create and offer craveable and innovative plant-based protein menu items that can only be found at KFC, Pizza Hut and Taco Bell over the next several years. Beyond Meat® and Yum! Brands expect to leverage their industry-leading research and development capabilities to meet the evolving tastes of the consumers of today and tomorrow.

“We are honored to enter into a global strategic partnership with Yum! Brands, one of the world’s largest restaurant companies. We look forward to expanding our work with the teams at Yum’s iconic KFC, Pizza Hut and Taco Bell brands to together bring truly delicious plant-based product innovation to consumers,” said Ethan Brown, Beyond Meat Founder & CEO.

Beyond Meat’s strategic partnership with Yum! Brands will be an expansion of the companies’ growing track record of collaborations to offer delicious and sustainable plant-based products. KFC was the first national U.S. quick-service restaurant to introduce plant-based chicken when it tested Beyond Fried Chicken™ at an Atlanta-area restaurant in 2019. Since the initial rollout, KFC has expanded testing of Beyond Fried Chicken in other U.S. cities. In 2020, Pizza Hut U.S. launched the Beyond Italian Sausage Pizza and the Great Beyond Pizza nationwide, becoming the first national pizza chain to introduce a plant-based meat pizza coast-to-coast.

Through this collaboration, Yum! Brands will build on its tradition of food innovation and creating new consumer markets for industry-defining items and increase the number of plant-based options that appeal to flexitarians, those looking to incorporate plant-based meat or more diverse protein options into their diets.

The result, as shown below, was a whiplash which first stopped out longs, only to hammer shorts moments later as virtually everyone lost money.

Tyler Durden
Thu, 02/25/2021 – 16:21

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