Alternative protein maker Beyond Meat on Monday posted its first profitable quarter in just a half year as a public company.
The El Segundo, California-based company reported profits of nearly $4.1 million for the July to September period, driven mainly by an increase in restaurant sales. On a per share basis, the company made about 6 cents per share, which beat Wall Street expectations of 5 cents per share.
Beyond Meat also posted revenues of nearly $92 million for the quarter, topping analyst forecasts of $82.6 million. In another positive sign, the company raised its sales forecast for the year to $265 to $275 million, up from a previous forecast of roughly $240 million.
Despite Beyond Meat’s earnings, investors retreated from the stock in after-hours trading on Monday. Shares rose nearly 5% to $105 during normal trading hours, but fell back to $97 after markets closed.
One reason why Beyond Meat shares— the October 29 expiration of the stock’s “lockup period,” which is when executives at the company and private investors will be free to sell the shares they bought at a discount before the startup went public. Some 48 million, or about 80%, of Beyond Meat’s outstanding shares are expected to free up, according to CFRA analyst Arun Sundaram.
Investors who sell their shares are expected to see a sizable profit on the stock, which is still trading about 285% more than its offering price of $25 per share despite the recent decline.
Investors are also watching to see how Beyond Meat fares with growing competition from food industry giants. Companies such as ConAgra, Hormel, Nestlé andhave all entered the emerging plant-based meat market, which analysts estimate could reach $40 billion over the next decade.
Beyond Meat CEO Ethan Brown said in an earnings call Monday that the company has been “preparing for a competitive market for years.”