(Reuters) - Beyond Meat Inc (BYND.O) beat quarterly profit and revenue estimates on Tuesday, benefiting from rising demand for its plant-based products at supermarkets and grocery chains and amid weak sales from restaurants due to COVID-19 lockdowns.
The company has been doubling down on its expansion in retail outlets, the most recent being its deal with Amazon Fresh. Its products are now sold at grocers, including Walmart Inc (WMT.N) and Amazon.com Inc’s (AMZN.O) Whole Foods.
“We’re repurposing lines that were running for food service to retail... So this is not about just waiting this out, it’s about how do we reroute to get to the consumer,” Chief Executive Officer Ethan Brown told Reuters.
The rethink in strategy comes as closure of dine-in areas and movement restrictions severely dented sales at its partner restaurants and Beyond Meat itself, leading it to suspend 2020 forecast.
Food service sales in March were about 23% lower than what the company had expected, while sales at retail outlets rose 12%.
“We can neither predict when or in what form normalcy will resume for our customers in this segment, nor when we’ll see resumption of any expansion plans for our product lines for the quick service restaurant customers in trial or test phase,” Brown told analysts.
In an update, the company said there was “no negative reason” to end the trial of its products at McDonald’s Canada in April.
The plant-based burger maker is also likely to benefit from the rising meat prices due to supply shortage, which has forced grocers to curb customer purchases of meat products.
“Beef prices have doubled in the last month, so it’s putting us closer within range and we’re going to try to further reduce that gap,” Brown said.
The company’s quarterly net sales more than doubled to $97.1 million (78.1 million pounds), beating expectations of $88.3 million, according to IBES Refinitiv data. Net income was $1.8 million, or 3 cents per common share, in the three months ended March 28, compared with a net loss of $6.6 million, or 95 cents per common share, a year earlier.
Analysts on average were expecting a loss of 7 cents per share.
Shares of the company, which had jumped 48.6% in April, rose 3% in extended trading.
Reporting by Praveen Paramasivam in Bengaluru; Editing by Shailesh Kuber and Arun Koyyur