Several food companies reported earnings over the last week. While manufacturing and retail are thriving with increased sales during the pandemic, portions of the foodservice segment continues to struggle.
Manufacturing
Beyond Meat’s second quarter revenue jumped 69% to $113 million as more households tried its plant-based products, reported Yakima Herald Republic (Aug. 4).
Sales outpaced Wall Street’s forecast of $99 million, according to analysts polled by FactSet. The company reported a net loss of $10 million for the April-June period. Adjusted for one-time items, including coronavirus-related expenses, Beyond Meat lost 2 cents per share.
The company had to pivot to make up for foodservice sales during coronavirus-related closures. In mid-June, for example, the company launched a 10-burger value pack for $15.99 at Walmart, Target, and other groceries. Burgers and sausages that were packaged for foodservice were also returned to factories and repackaged for consumers. As a result, retail sales nearly doubled during the quarter, even as foodservice sales dropped 61%.
“It’s not a small exercise, when it’s physical goods, to make a change like that over a quarter,” CEO Ethan Brown said. The company spent $5.9 million repackaging goods during the quarter.
Flowers Foods, maker of Nature’s Own bread, Tastykake, and Wonder bread, reported a record second quarter and year-over-year growth, reported The Motley Fool (Aug. 7).
The company posted a $1 billion revenue figure, surpassing forecasts by $10 million. CEO Ryals McMullian attributes the resilience to strong customer demand for basics and a mix shift to branded retail products.
Going forward, the company plans to refine its product mix and work on smoothing out the supply chain. Management expects these initiatives to generate savings between $10 million and $20 million in 2020.
Retail
Publix Super Markets Inc. reported same-store sales increased 20% in the quarter ending June 27, continuing the trend of accelerated supermarket sales amid the pandemic, reported The Ledger (Aug. 3). It estimated sales for the three months through June 27 increased approximately $1.5 billion or 16.1% due to the impact of the health crisis.
The company saw a second quarter profit of $1.4 billion, or $1.94 per share, more than double the $661.1 million profit, 92 cents per share, a year ago. “Sales are up for everybody,” said David Livingston, a grocery industry analyst based in Hawaii. “These levels will probably stay as long as the pandemic is around.”
The results for the first half of 2020 also benefited from the pandemic-induced economic surge. Publix’s first-half sales reached $22.6 billion, a 19% increase from $19 billion in the first half of 2019, while same store sales increased 17%. The company estimated sales for the six months rose approximately $2.5 billion, or 13%, because of the pandemic.
Ahold Delhaize NV’s operating income rose 78% to $1.19 billion for the second quarter, reported Reuters (Aug. 5).
“The engagement and strong execution of our teams have translated this unprecedented demand in both the U.S. and Europe, due to COVID-19, into outstanding results,” said CEO Frans Muller.
Ahold owns the Giant, Stop & Shop, Food Lion, and Hannaford chains in the U.S. The company predicts the outlook for 2020 to remain high, with a 55% increase in online sales.
Foodservice
In foodservice, Restaurant Brands International indicated its revenue fell 25% during second quarter 2020. Same-store sales decreased 13.4% for Burger King and decreased 29.3% for Tim Hortons but increased 24.8% for Popeyes Louisiana Kitchen, reported MarketWatch.
Wendy’s reported second quarter net income of $24.9 million, down from net income of $32.4 million last year, reported MarketWatch (Aug. 5). Revenue of $402.3 million was down from $435.3 million last year but below the FactSet consensus for $409.0 million. U.S. same-restaurant sales fell 4.4%, ahead of the FactSet consensus for a 5.6% decline. Global same-store sales fell 5.8%, just below the FactSet outlook for a 5.6% decline.
Same-store decrease was partially offset by the new breakfast menu, said Wendy’s. Breakfast accounted for about 8% of second quarter U.S. sales
Meanwhile, sales from Dickey’s Barbecue Pit rose 7.4% in July over June, growing past anticipated sales numbers by $1.6 million. The restaurant chain attributes this resilience to its More for Monday program and the Upgrade Your ‘Cue promotion, which provides more options for select sandwiches, all of which saw increased sales.
“Dickey’s mounting sales numbers are proof that we are not just surviving the pandemic, we are thriving beyond it,” said Laura Rea Dickey, CEO of Dickey’s. “Our More for Monday and Upgrade Your ‘Cue promotions are producing incredible results with our guests. We believe the success of both promotions is rooted in offering a wide variety of slow-smoked, Texas-style barbecue at an unmatched value.”
Additionally, Checkers’ revenue increased 4% to $64.4 million in second quarter. While the chain was trailing its competitors before the lockdowns, its losses were smaller than its competitors due to a quick pandemic procedure response and most locations already having dual drive-thrus, reported Bloomberg (Aug. 3).
