Green Mountain Coffee Roasters Inc. (GMCR), the maker of Keurig brand single-cup pods and brewers, rose the most in more than 10 months after reporting profit that beat analysts’ estimates as sales rose.
Green Mountain advanced 24 percent to $66.42 at the close in New York, the most since March 10, after yesterday reporting profit, excluding some items, of 60 cents a share. Analysts projected 36 cents, the average of 12 estimates compiled by Bloomberg.
Chief Executive Officer Lawrence Blanford has sought to draw customers by bolstering its K-Cup portfolio with Starbucks Corp. (SBUX) and Dunkin’ Brands Group Inc. products. Seattle-based Starbucks, which sells K-Cups in grocery and mass retail stores, said last month that annual pod sales may grow to $1 billion.
“We’re definitely following, to a degree, the Gillette razor, razor-blade model,” Blanford said in a telephone interview yesterday. Green Mountain sells its brewers near cost and makes money through K-Cup sales, he said.
K-Cup sales more than doubled to $715.7 million, while brewer sales rose 76 percent to $330.4 million in the quarter, according to the statement. The company sold 4.2 million brewers during the quarter, compared with 2.2 million a year ago.
Net income in the three months ended Dec. 24 rose to $104.4 million, or 66 cents a share, from $2.41 million, or 2 cents, a year earlier, the Waterbury, Vermont-based company said yesterday in a statement.
Revenue more than doubled to $1.16 billion, the company’s 13th straight quarter of sales growth exceeding 50 percent. Analysts projected $1.06 billion, the average of estimates compiled by Bloomberg.
Green Mountain said inventories more than doubled to $606.7 million in the quarter, from $269.1 million a year earlier.
The company said second-quarter profit, excluding certain items, will be 60 cents to 65 cents a share, compared with an average analyst estimate of 73 cents. Green Mountain reiterated its fiscal 2012 profit forecast, excluding some items, for as much as $2.65 a share. The average estimate of analysts was $2.55.
The coffee company has faced criticism from hedge fund manager David Einhorn that its market-share gains have peaked amid what he calls “a litany of accounting questions.”
Along with Starbucks and Dunkin’ Donuts, K-Cup portion pack brands include Caribou Coffee Co. (CBOU), Millstone, Gloria Jean’s and Folgers.
Green Mountain is also working with Luigi Lavazza SpA to develop an espresso machine to compete with Nestle SA’s Nespresso coffee brewers. Lavazza, based in Italy, owned 5.5 percent of Green Mountain shares as of May 6, according to data compiled by Bloomberg.
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