Keurig Green Mountain Inc. dropped to the lowest level in almost three years after Stifel Financial Corp. cut its forecast for the company’s sales, citing reduced K-Cup volumes, lower prices on coffee brewers and weak demand for the new Kold soda maker.
The Waterbury, Vermont-based company slumped 9.8 percent, or $4.36, to $40.13 at the close of trading in New York, the lowest since January 2013. The beverage-pod maker has fallen 70 percent this year.
Stifel analyst Mark Astrachan reduced his estimate for sales in fiscal 2016 and 2017 to declines of 7.8 percent and 7.2 percent, respectively. That’s down from the 2.1 percent and 5.4 percent drops previously forecast.
Keurig was forced to cut prices because of heightened competition and increasing availability of its products at Big Lots and T.J. Maxx for less than suggested retail, Astrachan wrote. Lukewarm reaction to the new Keurig Kold will also hurt results, he said in a note Monday.
“The company resorted to significant price discounts to stimulate demand given weakening channel sales and heightened competition in part reflecting away-from-home brewer market nearing saturation,” he said.
The Keurig Kold, released in September, is an attempt to combat the company’s slowing growth as demand for K-Cup beverage pods slumped. Keurig developed the soda-brewing machine over six years with Coca-Cola Co., its biggest investor.
Keurig will report fourth-quarter earnings Wednesday after the market closes. Analysts estimate per-share profit excluding some items of 71 cents, according to data compiled by Bloomberg, compared with reported earnings of 90 cents this time last year.