Green Mountain Coffee Roasters Inc. (GMCR) fell after Stifel Nicolaus & Co. said demand is weakening for the company’s Keurig single-serve coffee machines.
Green Mountain declined 4.5 percent to $47.72 at the close in New York. The shares have gained 45 percent this year.
Brewer sales are weakening, which is “inconsistent” with comments from Green Mountain that demand remains strong, Mark Astrachan, an analyst with Stifel Nicolaus in New York, said today in a note. Shipments of Keurig brewers from China declined 5 percent in October and 28 percent in November, compared with last year, Astrachan said.
“Shipments of Keurig brewers will continue decelerating,” said Astrachan, who advises selling the shares. In turn, “slowing household penetration of brewers will increasingly pressure K-Cup shipments,” he said.
Beginning in October, “we requested that U.S. Customs and Border Protection suppress public availability of data regarding our imports,” Suzanne DuLong, a Green Mountain spokeswoman, said in an interview. She declined to comment on the Stifel note or confirm any import figures.
“We’d prefer the data not be available publicly,” she said.
Next year, Waterbury, Vermont-based Green Mountain will lose the main patents on K-Cups, allowing competitors to make less-expensive versions. The company has sought to boost sales and discourage competition by partnering with brands such as Starbucks Corp. (SBUX) and Dunkin’ Brands Group Inc.
The declines in Keurig shipments aren’t comparable to earlier months because of changes in how the data is traced, Akshay Jagdale, an analyst at KeyBanc Capital Markets Inc., wrote in a note today. He advises buying the shares.
Astrachan didn’t respond to a phone call and e-mail seeking comment. Jagdale declined to be interviewed about Green Mountain.
Green Mountain didn’t import any single-cup brewers in November, according to Zepol Corp., a trade data company based in Edina, Minnesota. Other vendors may have imported Keurig brewers to sell, Zepol said. Total U.S. imports of all single- serve brewers fell 5 percent in November compared to the year prior, the data show.
Astrachan said Green Mountain’s inventory has been increasing faster than sales and is more than double that of last year.
“The amount of brewers and K-Cups could be substantial,” he said.
Green Mountain had $672.2 million in inventory as of Sept. 24, compared with $262.5 million a year earlier, according to a company filing.
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