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Beyond beats Q2 revenue estimates, sees rapid expansion in grocery sales

Beyond Meat released its second quarter earning report after hours on Tuesday. The company beat investors’ expectations on revenue and matched on earnings per share, saying that its full-year outlook would remain suspended. Yahoo Finance’s Brian Sozzi joins The Final Round panel to break down the food company’s earnings report.

Video Transcript

SEANA SMITH: Welcome back to "The Final Round" here on Yahoo Finance. The earnings reports keep rolling in. Right now, we have Beyond Meat shares off just around 5% here after hours. Brian Sozzi has the numbers for us. Brian.

BRIAN SOZZI: Yeah, Seana, Beyond Meat reporting, I would say, two different sets of numbers. On the headline, you'll see them reporting a loss, a net loss of $0.16 per share. That's why I think you're seeing the stock trade down about 7% in the initial take. Estimates were for a loss of $0.02, but they did put out adjusted numbers. Adjusted loss per share is at $0.02. That is in line with consensus.

So what is the difference between those two results? They're calling out $5.9 million in costs, what they believe is one-time costs related to repackaging some of their products. So instead of having those products shipped to restaurants, they started taking and making value packs and shipping them to retail stores.

But overall, you can see a business that has been pressured within the restaurant space, but they're still putting up triple-digit growth with-- inside the retail business in the US and international.

Now, I caught up-- I just caught up with Beyond Meat founder and CEO Ethan Brown. Telling me he's very proud of the strong retail results, so that is good. He's seeing strong repeat visits from people buying the product in the store. They're spending more per transaction. And I think over the next couple of months you'll probably see more deals from Beyond Meat, likely in China.

SEANA SMITH: Yeah, Brian, it's interesting. I'm just curious-- just I know you follow this company so closely-- just how exposed they are to the fact that we've seen such a slowdown in the food-service business here. So many restaurants remain closed or only able to operate with seating outdoors-- just how big of a risk factor that is for Beyond Meat here, at least in the short term.

BRIAN SOZZI: Well, they have essentially made their name-- also Impossible Foods-- getting into restaurants. You know, restaurants are very important with them. They have a very important relationship with Dunkin' Brands. They launched some time ago.

But you could see the pressure in their results. The food-service business in the US, sales down 65.3%. International, down over-- about 56 and 1/2% international. So that food-service business is important to them, and it's not necessarily-- there's no guarantee that it hit a bottom in the second quarter.

But ultimately you're seeing the market trying to figure out what Beyond Meat actually reported on the bottom line. But worth noting here too as well, this is the first time Beyond Meat has broken $100 million in sales in a single quarter, coming in at $113.3 million.

SEANA SMITH: Yeah, certainly interesting numbers here from Beyond Meat. I guess cutting some of its losses here after hours now, off just over 3%. Brian Sozzi, thanks so much for breaking that for us.