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Beyond Meat Is Set to Thrive Despite Rising Competition

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Overwin Corona Virus

Beyond Meat (NASDAQ:BYND), the maker of vegetable-based meat substitutes is enjoying great demand as the pandemic made people more health-aware. Its stock price has more than doubled in 2020. Beyond Meat came a long way since four years ago when it welcomed Tyson Foods (NYSE:TSN) as a minority investor. Its CEO Ethan Brown believed this was the best way to grow the plant-based meat market. Afteral, if you cannot beat the opposing, entrenched animal-protein incumbents like Tyson, join them.

Ambitious goals

This move was controversial at the time but Tyson’s investment helped this small company make its way towards becoming a mainstream food option. Tyson exited its Beyond Meat investment in 2019. But Beyond Meat does not intend to partner with another major animal-protein company in the near future. It has set a clear goal to become a Tyson-caliber business, maybe even within the next decade.

Backdrop

Beyond Meat has been around since 2009, but it went public last year. Last summer, it jumped at its first large-scale commercial opportunity when Dunkin Donuts (NASDAQ:DNKN) started a pilot program of its sausage sandwiches in Manhattan. Nationwide distribution followed in the fall of 2019. Meanwhile, Beyond Meat has found plenty of other distribution channels over the last year and a half and has since enjoyed valuable word-of-mouth advertising.

Needless to say, Beyond Meat has a long way to go to match the production scale of Tyson. It sold just over 51 million pounds of plant-based products last year which is a significant increase from 15 million pounds in 2018. It is laying foundation to become a global food powerhouse.

Production is one thing, distribution is another

At the end of last year, Beyond Meat’s products were available in 65 countries, but mainly through exports. This year, it made progress by acquiring a manufacturing facility in the Netherlands with plans to open a co-manufacturing plant to facilitate Beyond Meat production and distribution throughout Europe. It also reached an agreement with local Chinese officials to open a facility near Shanghai to increase the availability of its products in Asia. Beyond Meat is expanding its distribution, including Walmart (NYSE: WMT) which just tripled its distribution of Beyond Meat products.

Accessibility is improving

Although it was off to a slow start, Beyond Meat’s plant-based offerings are now within reach. Kroger (NYSE:KR) has been on the Beyond Burgers for almost three years now. Over the summer, Target (NYSE:TGT) sold out its Cookout Classic patties. Whole Foods Market’s offerings included its products even before it was acquired by Amazon (NASDAQ:AMZN). Beyond Meat sandwiches can be also found at many locations such as The Cheesecake Factory (NASDAQ:CAKE). Even McDonald’s (NYSE:MCD) was forced to board the plan-based train as it introduced Beyond Burgers in Germany, but who says a larger deal won’t follow up later.

The way forward is chicken

Speaking of new products, although Beyond Meat has many beef and pork alternatives, but when it comes to chicken, it is perfecting a new product which is yet to be launched. Back in July, its ongoing trial of Beyond Fried Chicken at Yum! Brands’ (NYSE: YUM) KFC locations in California entered its third round. Therefore, it is reasonable to expect Beyond Meat will launch a widely available chicken product in the near future.

Competitors

Rising competition could be a problem, but Citigroup (NYSE: C) analyst Wendy Nicholson believes there could be room for more than one winner.

In Wednesday’s report, Nicholson found that although alternative-meat sales have moderated from their March highs when many lockdowns began, they are still higher than before the pandemic. Moreover, in the four weeks up to October 3rd, sales of these jumped 39.1%, which is up from 37.2% in September. These figures are way ahead of the 10.9% increase in sales of fresh meat. Nicholson concluded that the company’s new product lines are resonating well with consumers, even with increased competition. Beyond Meats ’s YoY sales growth accelerated in October, rising from 49.3% in September to 56.4%, which is significantly ahead of the 39.1% logged by the plant-based category as a whole.

Nestlé joining the green train

As the demand for plant-based foods continues to surge, Reuters reported Nestlé (OTC: NSRGY) will launch more plant-based products in the next few weeks. Since the beginning of this year, the Swiss food giant has made clear its intentions to aggressively innovate to capitalize on vegan and vegetarian opportunities.

Outlook

A much higher profitability isn’t guaranteed, but solid foundation is being laid this year. The potential is there, reflected in the fact that Beyond Meat’s stock has more than doubled since this unprecedented year began with plant-based trend poised to strengthen even further as more people try out these new products. If it can execute Ethan Brown’s mission, Beyond Meat can certainly reward its shareholders over the next decade.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

COVID-19 Will Make Disney Even Stronger

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Disney News

During its last reported quarter, Disney (NYSE: DIS) lost $2.4 billion of its parks and experiences segment which saw revenue drop as dramatically as 61%, generating $2.6 billion. The segment includes its parks, cruise lines, resorts and merchandising, which were ‘perfectly’ exposed the havoc brought on by COVID-19. But, the worst seems to be behind the legendary entertainment giant.

The effects of a global pandemic

Although the majority of Disney’s theme parks managed to reopen during the company’s fiscal fourth quarter at a limited capacity, the continued closure of Disneyland California was a big financial hit. It is certain that it will remain closed until the end of the year as state guidelines prohibit reopening until coronavirus cases in counties fall below 1 per 100,000. This target will be difficult to achieve as cases soar throughout the country.

In the second quarter, the pandemic took $1 billion from this segment’s operating income. By the end of the third quarter, the loss amplified to $3.5 billion. The fourth quarter that ended on October 3rd, 2020 saw a loss of $2.4 billion with COVID-19 ended up costing Disney $6.9 billion for the whole year.

Disney Plus ended up being Pixie Dust

The flip side is that the measures taken to combat the spread of the virus actually launched Disney’s latest streaming venue to the stars. By October 3rd, Disney+ had 73.7 million subscribers, exceeding all expectations by far. Amilestone Disney expected to reach in 2024 was achieved during its very first year of existence.

With an average revenue per user of $4.52, Disney now has a new jewel that is expected to generate a revenue of approximately $4 billion on an annual basis. Moreover, this forecast implies an assumption that the current number of subscribers remains unchanged. Considering that Disney’s streaming star is set to launch in many new countries across the globe, the number of total subscribers is likely to continue increasing.

Streaming battlefield

The streaming boom is perhaps best described by the Los Gatos, CA-based tech firm that benefited from the influx of all new entries that aim to challenge Netflix (NASDAQ: NFLX), including Disney+, Apple TV+ (NASDAQ: AAPL) and Comcast Corporation’s (NASDAQ: CMCSA) Peacock. Roku (NASDAQ: ROKU) reported 14.8 billion hours of streaming in its third quarter, which is a growth of 54% compared to last year’s quarter.

Only one streaming newbie does not have a deal with Roku and that is AT&T’s (NYSE: T) WarnerMedia’s HBO Max. HBO Max was launched in May and didn’t come near to Disney’s subscribers record, but WarnerMedia seemed pleased with 8.6 million account activations. However, last Monday, the subscription service just announced it sealed a distribution deal with one major gatekeeper, Amazon (NASDAQ: AMNZ) Fire TV. Two days later, Warner Bros revealed Wonder Woman 1984 would be released on HBO Max along with opened theaters next month. It seems the world is, once again, asking too much of Diana with the movie now expected to simply break even as opposed to achieve a new box office record. This announcement only intensified speculation that Roku’s 46 million households will soon enter the equation.

Despite streaming wars intensifying, Disney has something that no one else has. Its secret weapon is its legacy in the form of its content for every age group and one can argue, every taste. Disney’s content is the wholly grail that appeals to everyone on the planet and is what enabled it to lure in all those subscribers in a record amount of time.

Disney will return even stronger

It appears that Disney is half to one year away from leaving this pandemic nightmare behind it. But once it goes back to operating at full capacity, Disney will also have a rapidly growing streaming business to support its highly profitable legacy businesses that are slower-growing. Disney achieved a good track record in the battle against COVID-19 by adapting its operations to a sanitary framework and these efforts might allow the rest of its businesses to return to normalcy by next summer. Based on early results from the partially opened theme parks and early reservations for cruises, the iconic entertainment company revealed that there is pent-up demand for these businesses that will flourish as soon as they get back up and running. Just like its heroes, Disney is poised to triumph at the end of this global saga. There is no doubt that Disney will “return” and even stronger than it was before COVID-19 turned the world upside down.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Thanksgiving Week

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Thanksgiving

As the stock market will be closed for Thanksgiving on Thursday and open only for a half-day of trading Friday, Wall Street is getting ready for a shorter week. There are no new IPOs scheduled for this week either. The past week brought a waterfall of retail earnings, but a river of reports is due this week as well that could show how specialty stores are managing as essential stores continue to gobble up market share.

Monday

After market close, Urban Outfitters (NYSE: URBN) will open the week. Urban’s stock soared after reporting a surprise profit in August but as for all retailers these days, e-commerce will be the highlight of report. Investors will also look at its Anthropologie brand that has suffered due to a hefty price tag. Analysts are expecting earnings per share to come at 44 cents.

Tuesday

Autodesk Inc. (NASDAQ: ADSK) results for the fiscal third quarter are coming out after the close. Zack’s consensus estimates call for $0.96 in EPS and $942.24 million in revenue.

Dollar Tree (NASDAQ: DLTR) comes with strong revenue and earnings expectations for Q3 as in the last reported quarter, the company delivered an earnings surprise of 23.6%. Although it managed to be classified as an essential as opposed to a specialty retailer, its stock has lagged behind its peers, event after reporting better-than-expected results in August. Its downsides are in greater exposure to discretionary and seasonal items as well as operational issues, which is why it stock is up just 2% this year, compared with Dollar General’s (NYSE: DG) 36% gain. This report is another chance to prove it can keep up with its discount rivals with consensus forecast being $1.15 in EPS on a revenue of $6.12 billion.

As for Medtronic (NYSE: MDT), the consensus forecast calls for $0.80 in EPS and $7.08 billion in revenue for the fiscal second quarter.

The retail front

Expectations have also likely been raised for Burlington Stores (NYSE: BURL) as loyal shoppers have been quick to return to stores. Recent reports from larger peers such as TJX Cos. (NYSE: TJX) have been encouraging with analysts predicting EPS to swing from a 56-cent loss in the prior quarter to a 16 cents gain. But, this is still far below earnings of $1.55 a share in the same period last year.

As for Dick’s Sporting Goods (NYSE: DKS) analysts anticipate $0.98 in EPS and $2.22 billion in revenue. With shares down more than 48% year to date, Nordstrom (NYSE: JWN) has been the worst performer of the group, although it has traded roughly in-line with its department store peers. A multi-brand specialty retailer, American Eagle Outfitters (NYSE: AEO) might not be the most widely known stock at the moment, but it received a lot of attention from a substantial price increase on the stock exchange over the last few months. The Gap Inc (NYSE: GPS) has seen a major reversal of fortune in 2020. During the first half of the year, it was out luck with closures and its rent dispute. But, then it got upgraded by analysts, it sealed a 10-year deal with Kanye West, and enjoyed a rebound in the second quarter due to strong e-commerce growth. Now the question is if Gap can keep up its online momentum as well as the general one. Analysts are expecting EPS of 31 cents for the third quarter, an improvement from prior quarter’s 17 cents but still significantly below last year quarter’s 53 cents.

Tech

After the closing bell, HP Inc. (NYSE: HPQ) will report its fiscal fourth-quarter results with analysts forecastingEPS of $0.52 on a revenue of $14.65 billion. As for Dell Technologies (NYSE : DELL), the consensus forecast is at $1.39 in EPS on a revenue of $21.85 billion for the fiscal third quarter.

Moving on to software and cloud computing, VMware’s (NYSE: VMW) is expected to generate total revenues of $2.80 billion, implying 5.4% year-over-year growth for its third-quarter with non-GAAP earnings of $1.42 per share. While microprocessor and memory market ‘servers’ remained largely undisrupted by the pandemic, Analog Devices (NASDAQ: ADI) still faced challenges due to an unstable demand as well as seasonal factors. However, the situation is improving and the management is confident of ending the fiscal 2020 on a positive note and getting back on track next year.

Consumer electronics retail

Best Buy’s (NYSE: BBY) third-quarter earnings are expected to be strong as it benefits from pandemic-related trends. The consensus forecast is for EPS of $1.69 on a revenue of $10.97 billion.Stock has already added about 36% year to date, leaving other big-box retailers behind. Paradoxically, much of that strength came from COVID-19 that boosted online sales as people needed electronics to facilitate their home stays. Moreover, the digital business continued booming even after most of its stores were allowed to reopen. As the virus looks poised to wreak more havoc over the winter, Best Buy seems to be poised to benefit. But, if it can convince investors that its post-vaccine outlook is just as bright, it could easily be on a path to even more gains.

Foods

Moving on to jams, peanut butter and other toppings, J.M. Smucker (NYSE: SJM) is likely to register a decline in its bottom line when it releases second-quarter fiscal 2021 numbers although it delivered positive earnings surprise of 41.1% in the last reported quarter. Meanwhile, Hormel Foods (NYSE: HRL) is likely to register an improvement in its top line along with a YoY decline in its bottom line. The Zacks Estimate for revenue stands at $2.60 billion, which would be 3.8% from the previous year’s comparable quarter.

Wednesday

Deere & Company (NYSE: DE), the world’s largest makers of farm equipment, is performing excellently so far this year. Shares of the agricultural, construction and forestry equipment manufacturer are up about 50% for the year to date. As for the fiscal fourth quarter, the consensus forecast stands at $1.38 in EPS on a revenue of $7.68 billion.

Outlook

Although Thanksgiving is an optimistic holiday that is all about gratitude, the gloomy news of rising daily coronavirus cases and worries of the U.S. economic recovery will still be in the air during the last week of November. The third-quarter earnings reporting season is slowly winding down but as for the IPO front, at least December is shaping up to be a very busy month. With the e-commerce retailer Wish, the payments company Affirm, along with the eagerly awaited Airbnb all filing to go public, at least we’re in for a grand finale of this unprecedented year.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

A Lesson From Starbucks

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Starbucks News

Gourmet beverages might belong to the category of cheapest luxury goods, but these manufacturers suffered this year along with the overall economy. Even leaders such as Starbucks (NASDAQ: SBUX) and PepsiCo (NASDAQ: PEP) saw significant sales declines as soon as lockdowns took place, but they managed to crawl out from the mess.Starbucks specifically has taken coffee to the next level with 32,000 cafes across the globe. So, what did Starbucks do that helped it stay afloat?

The effect of a global pandemic

Starbucks revealed COVID-19 made it lose $1.2 billion in sales as an impact of limited operations, reduced hours as well as closures. This year, the US coffee chain saw everything but its typical quarter where sales and comps both score notch high growth numbers as they bottomed out at as low as a 65% decline during the company’s third quarter.

Competitors

For now, the coffee giant does not really have a real competitor be threatened by. Dunkin’ Brands’ (NASDAQ: DNKN) Dunkin’ Donuts stores and McDonald’s (NYSE: MCD) do both sell coffee. Moreover, McDonalds announced last week it plans to spend approximately $381.6 million in the Chinese coffee market over the next three years via its coffee brand McCafé. By 2023, 4,000 McCafé outlets should be up and running on the Chinese mainland so coffee wars might intensify in the near future.

Although the controversial Luckin Coffee Inc (OTC: LKNCY) did shake its ground in China, there isn’t another retail chain anywhere the size of Starbucks that only focuses on beverages. Both Dunkin’ and McDonald’s trail behind Starbucks in sales and Luckin is still grappling with a fraud controversy despite its stock surge.

The right “recipe”

Since COVID-19 started its relentless march across the globe, Starbucks aggressively defended its top position by opening more drive-thrus, giving salespeople point-of-sale devices for quick transactions, and focusing on suburban store openings. Last week, it announced it is raising wages for its baristas of at least 10% starting December 14th. Starbucks is already known for giving its workers more generous benefits and pay compared to its peers in the restaurant industry.

The secret weapon – the mobile app

In September, the coffee giant launched a new loyalty program in September that offers an enhanced shopping experience as well as rewards for members. Those same members that account for a large chunk of sales.

It’s been five years since Starbucks rolled out the ability to place orders using its mobile app. Customers are loving this feature as it is as good as it gets to benefit from the customized Starbucks experience. The company rolled out mobile payments already in 2011, letting customers link a Starbucks card to the app to pay for their orders. This ended up being a brilliant strategy that more than paid off during the pandemic which demanded a ‘contactless’ service. Moreover, it made Starbucks’s app the most popular mobile payment processor as it’s sometimes even more used than Apple’s (NASDAQ: AAPL) ApplePay, according to e-Marketer. Starbucks revealed that almost one quarter of total orders in its stores come from the mobile app.

Results

Despite the difficult environment, the coffee giant managed to exceed expectations with its last reported quarter largely because of a decision it made years ago. Analysts had expected Starbucks to earn $6.06 billion, but despite the pandemic having reduced its customer traffic, revenue for the quarter ended up being $6.2 billion. Adjusted EPS of 51 cents also exceeded Bloomberg’s estimate of 31 cents.

While the pandemic is still raging over many parts of the globe, the worst seems to be behind. Starbucks did see a 9% revenue drop in the fourth quarter ended on September 30th, but it’s been improving quarter to quarter while topping estimates every time.

Due to the global health and consequent economic crisis, Starbucks has seen its revenues fall 11% YoY to $23.5 billion during FY 2020 that ended in September. But, it managed to beat earnings expectations with EPS of $0.79 while reporting a cash inflow of $1.6 billion from operating activities.

FY 2021

Starbucks is forecasting double-digit growth in fiscal 2021 as it aims to regain everything it lost in 2020 while moving forward. Earnings were already positive in the fourth quarter and sales are already positive in its second fastest-growing market- China. Trefis expects Starbucks’ revenues to recover after this unprecedented year and rise by 21%, in the range between $28 billion to $29 billion. Its net income is likely to follow the positive trend of recovery as it is estimated at $3.7 billion, with the expected EPS of $3.17.

Outlook

Even the business that were able to stay open during the pandemic felt the pain of those that were forced to close their doors. Everyone who survived had to quickly figure out how to make drastic changes to the way they served their customers while protecting their employees from the virus. Remarkably, Starbucks managed to keep going after a very harsh reality check. Five years after it launched its mobile app, it ended up being ‘saved’ by this feature. This story only shows that being focused at constantly improving the customer experience never gets old. The lesson is simple: what was good for the customer ended up being very good for the business.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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