Green Mountain Falls After Quarterly Brewer Sales Decline

Green Mountain Coffee Roasters Inc., maker of Keurig single-serve pods and machines, fell in New York after reporting declining coffee brewer sales in its fiscal third quarter.

The shares dropped 3.5 percent to $76.48 at the close. Green Mountain, based in Waterbury, Vermont, has gained 85 percent this year, while the Standard & Poor’s Midcap 400 Index has advanced 21 percent.

Brewer and accessory sales dropped 4.3 percent to $133.1 million in the three months ended June 29, Green Mountain said in a statement yesterday. Sales growth of single-serve packs slowed to 18 percent in the quarter from 21 percent in the prior three months.

Chief Executive Officer Brian Kelley has been trying to lure Americans with higher-end coffee brewers and new varieties of K-Cups as competitors introduce less expensive single-cup pods. Green Mountain, which has seen its sales growth slow this year, announced in July an agreement with Cinnabon to make cinnamon-roll flavored coffee cups for Keurig machines.

Net income rose 59 percent to $116.3 million, or 76 cents a share, from $73.3 million, or 46 cents, a year earlier, Green Mountain said. Excluding certain items, profit was 82 cents a share. Analysts projected 76 cents, the average of 12 estimates compiled by Bloomberg.

“Our total revenue growth of 11 percent was at the low end of our expectations, driven primarily by a sales decline in Canada,” Kelley said in the statement. “Importantly, our U.S. business is very healthy.”

The company forecast adjusted earnings of 69 cents to 74 cents a share in the fourth quarter. It projected an increase in sales of 11 percent to 15 percent, which would give a range of $1.05 billion to $1.09 billion, according to data compiled by Bloomberg. Analysts on average projected 71.5 cents on revenue of $1.02 billion.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.