Beyond Meat (NASDAQ: BYND) made a pretty big announcement on Thursday. In addition to releasing its fourth-quarter financial results, which were a little disappointing by most standards, the company also said that it managed to secure a major deal with McDonald’s (NYSE: MCD) to provide alternative meat products for their burgers. While you would expect shares to soar in response to such a big announcement, Beyond Meat’s stock ended up doing the opposite. More on that in a moment.
Under a new three-year deal with McDonald’s, Beyond will be the primary supplier of patty for the burger chains McPlant burger, which is currently being tested in certain global markets. At the same time, the two companies will be working together to develop substitutes for egg, pork, and chicken products as well.
Additionally, Beyond Meat also signed a major deal with Yum Brands, which would involve creating plant-based alternatives for items found in Pizza Hut, Taco Bell, and KFC. The agreement would last for at least a few years, with the specific financial details not being made public at the time.
“We are proud to enter into this strategic global agreement with McDonald’s, an exciting milestone for Beyond Meat, and look forward to serving McDonald’s as they bring expanded choice to menus globally,” said Beyond Meat CEO and Founder Ethan Brown.
While all of this is great news for Beyond Meat, shareholders were actually disappointed with the company on Thursday. Fourth-quarter financial results ended up being worse than expected, with these major deals not doing that much to lift shareholder spirits. Revenue came in at only $101.9 million, less than the $103.9 million most analysts were expecting. At the same time, the company reported a bigger quarterly loss than expected also. Beyond Meat’s Q4 loss per share came in at 34 cents, compared to the 13 cents Wall Street was projecting.
As such, shares of Beyond Meat are actually down following the news, despite how big of a deal these partnerships are. Beyond Meat’s stock fell by 5.5% on Thursday following the news, although shares are picking up a little in after-hours trading.
While the pandemic ended up hurting demand for Beyond Meat products significantly, with fewer people dining out than usual, the company has managed to survive through the worst of the lockdowns. Most analysts covering Beyond Meat remain quite optimistic about its future, especially considering the growing demand for alternative meat products.
Beyond Meat Company Profile
Beyond Meat Inc is a food company based in the United States. It offers a portfolio of revolutionary plant-based meats. The company has developed three core plant-based product platforms including beef, pork and poultry. Its flagship product is The Beyond Burger, is designed to look, cook and taste like traditional ground beef. It generates revenues primarily from sales of its products, including The Beyond Burger, Beyond Sausage, Beyond Chicken and other plant-based meat products. Its customers include mainstream grocery, mass merchandiser and natural retailers, as well as restaurants and other foodservice outlets mainly in the United States. – Warrior Trading News