Conflicting stories about the Beyond Meat Inc. (BYND) collaboration arose

Shares of BYND, a plant-based meat producer, were having a drab day until around 2 p.m. ET.
 
CENTRAL, Hong Kong - June 1, 2022 - PRLog -- Then came word that fast-food behemoth McDonald's Corporation (MCD) had permanently adopted the McPlant burger to its menu, sending BYND's stock soaring. The stock had gained about 34%. Then followed by another report, claiming that the original one had been "misconstrued."

The first piece is from the Fast Company website. The title in the original edition said that the McPlant burger (a menu item that debuted in the United States in October 2020) would be permanent. Although the plant-based burger isn't co-branded with BYND, the company is a provider of plant-based beef for McDonald's. This is why the stock of BYND has soared.

However, Bloomberg reported immediately after that MCD claimed that the initial Fast Company headline "misconstrued" the situation. There is nothing new to report, according to this source. BYND was forced to return to Earth as a result of this. However, as of today, it was still up approximately 9%.

BYND's sales in 2021 was $465 million, down 14% from the previous year. Some investors were concerned about expansion and rightfully so. The more concerning loss has been the eroding of its gross profit margin, which has dropped to only 14% in the fourth quarter of 2021, compared to a gross margin of roughly 35% previously. Gaining economies of scale is one way a firm like Beyond Meat BYND might boost its gross margin. A co-branded burger with MCD would, admittedly, help with brand awareness. However, supplying the world's largest burger business might help it get more scale, which could help it improve its dwindling profit margins.

BYND is slated to release its first-quarter financial results in May of 2022. Investors may learn more about the company's collaboration with MCD at that time. However, even if we don't, investors should pay attention to what management has to say about increasing profit margins and plans to return to top-line growth.

Ability Corporate Advisory Limited [https://abilitycorporateadvisory.com] is an independent Firm established in 2009 and headquartered in Hong Kong. As a boutique Firm, we are free from conflicts of interest or biased advice that can arise from misaligned incentives or commission-based structures. We offer rational investment and asset management recommendations based on a thorough understanding and analysis of your individual financial circumstances, risk profile, priorities and goals.

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