Beyond Meat goes beyond its initial public offering

Beyond Meat, a pioneer in ‘meaty’ plant-based products, is looking for new money: after a quarter of strong growth but with increasing losses, the American food brand brings new shares to the stock market.

More turnover, more losses

Just three months after its initial IPO, Beyond Meat wants to float another 3.25 million shares, as the producer of vegetarian meat alternatives announces right after the publication of its second-quarter earnings. Beyond Meat may be an international hit – the citizens and sausages can be found in 51 countries already – but its growth appears to come at the expense of profitability.

The company’s sales increased by no less than 287 % (meaning they almost quadrupled) to 67.3 million dollars (60.4 million euros) in the past second quarter, whereas analysts only expected a 52.7 million dollars (47.3 million euros) turnover. However, the results were offset by a net loss of 9.4 million dollars (8.4 million euros), which was significantly more than the 7.4 million dollars (6.6 million euros) below zero a year earlier. Losses were higher than analysts expected as well.

Three million new shares

CEO Ethan Brown nevertheless expects the next two quarters to be the company’s strongest and forecasts even higher sales in the third quarter. There should also be fewer capacity problems this summer, although there may still be “very short-lived outages” during this year’s barbecue season.

For the entirety of 2019, Brown confidently raises his outlook: Beyond Meat now forecasts net sales of 240 million dollars (some 215 million euros), compared to a prognosis of 210 million dollars only three months ago. In the meantime, however, many more restaurant chains have joined forces with the no-meat producer: almost half of all turnover already comes from restaurants and the food service industry. Retail accounts for the larger other half.

Beyond Meat does see increasing competition from other players such as Nestlé and Unilever, who are also investing heavily in meat substitutes. The board of directors will therefore proceed with a second IPO, in which existing shareholders will float 3 million shares on the stock exchange and the company itself will also be releasing another 250,000 of its own shares. With that money, the producer wants to invest in further expansion.