Why Beyond Meat Inc (NASDAQ: BYND) stock is crashing

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Beyond Meat Inc (NASDAQ: BYND) stock fell over 19.1% on 29th October, 2019 (As of  12:17 pm GMT-4; Source: Google finance) on concerns over competition and posted third quarter of FY 19.

The company has experienced growth in sales across both its grocery and restaurant divisions, as its meatless meats drew in more customers and kept existing customers coming back. Sales to restaurants and foodservice forms about 45% of Beyond’s revenue for the third quarter. Beyond, which reported $41.5 million in net sales for this business, has continued to extend its restaurant partnerships. McDonald’s, Yum Brands’ KFC and Subway all had announced tests during the third quarter. Despite increased competition, the company’s grocery business saw net sales of $50.5 million during the busy summer grilling months.

Further, BYND is trying to become an international company. This can be seen from its recent hires, like appointment of Coca-Cola veteran and incoming chief marketing officer Stuart Kronauge and former Tesla executive and current Beyond chief operating officer Sanjay Shah. The company is also trying to increase its product line-up. BYND is currently working on a meatless fresh chicken cutlet, but there is no timeline yet. It also will continue to work with nuggets and boneless wings, like those tested with KFC.

BYND in the third quarter of FY 19 has reported the adjusted earnings per share of 6 cents, while adjusted revenue growth of whopping 250 percent to $92 million in the third quarter of FY 19. The sales grew for the third quarter of 2019 due to an increase in the fresh product platform across retail, restaurant, and foodservice channels. This reflects the company’s expansion in the number of retail and foodservice points of distribution, including new strategic customers, new international customers and greater demand from existing customers.

Moreover, the company had expanded over 1,600 year-ago points the gross profit margin to 35.6%, with strong cost and expense leverage, leading to the first quarter of positive net income in the company’s history. Adjusted EBITDA has increased by more than $16 million to $11 million, representing a 12% adjusted EBITDA margin.

BYND has raised its full year 2019 outlook for revenue. The company now expects revenue to be in a range of $265 million to $275 million, up from a prior forecast of more than $240 million. The company also expects adjusted earnings before interest, taxes, depreciation and amortization to be of $20 million for fiscal 2019.

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