* 4th-qtr EPS of $0.64/shr top Wall St view of $0.48/shr
* Sales of $946.7 mln beat Street estimates as well
* Expectations for holiday quarter, new year top Street's
By Martinne Geller
Nov 27 Green Mountain Coffee Roasters Inc
forecast quarterly and full year earnings well ahead of
analysts expectations, helped by an expanded lineup of
single-serve coffee makers and drinks, sending its shares up 22
percent in after-hours trade.
Green Mountain, which makes the Keurig brewing system and
the K-Cups that go with it, is the leader in the
small-but-growing U.S. market for single-serve coffee, though
its shares have been targetted by short-sellers and at Tuesday's
close were down 74 percent since September last year.
Marc Riddick, an analyst with The Williams Capital Group,
said Green Mountain's ability to beat estimates on sales,
earnings and outlook was "exceptional".
The performance might not change the minds of short-sellers
who have been active since influential investor David Einhorn
cast doubts on Green Mountain's sales figures, growth projects
and accounting practices, he said.
"I do think it allows some long-only investors the
opportunity to take a fresh look at the name," Riddick said. "A
strong quarter, a good move in this stock and a new CEO coming
onboard is a fairly powerful combination."
Green Mountain Chief Executive Lawrence Blanford is retiring
next month, to be replaced by Brian Kelley, an executive from
Analysts have welcomed Kelley's product and supply chain
expertise after Green Mountain had difficulty forecasting demand
for its coffee and had to deal with a U.S. securities probe into
its accounting, and the demotion of founder Robert Stiller after
ill-timed stock sales due to margin calls.
With an additional selling week in the quarter to boost
results, Green Mountain said net income was $91.9 million, or 58
cents per share, in its fiscal fourth quarter ended on Sept. 29,
up from $75.4 million, or 47 cents per share, a year earlier.
Excluding items, earnings were 64 cents per share. On that
basis, analysts on average were expecting 48 cents, according to
Thomson Reuters I/B/E/S.
Net sales jumped 33 percent to $946.7 million, topping
analysts' average estimate of $902.7 million.
Green Mountain raised its forecast for the new fiscal year
to $2.64 to $2.74 per share, up from $2.55 to $2.65 per share
previously. It expects annual net sales to grow 15 percent to 20
For the current first quarter Green Mountain forecast
earnings of 62 cents to 67 cents per share and net sales growth
of 14 percent to 18 percent. The slightly lower sales growth
forecast was due to an unusually strong quarter last year.
The first quarter includes the key holiday shopping period,
when gifts of coffee makers can turn many people into ongoing
Keurig customers. Analysts on average expected earnings of 59
cents for the quarter and $2.51 for the year, according to
The September expiration of certain of Green Mountain's
K-Cup patents opened the door for lower-cost rivals that stand
to pressure prices overall and margins for Green Mountain, which
makes most of its profit from the cups rather than the brewers.
But Blanford said, on his last conference call with
analysts, that he had not seen any "marketplace dynamics that
have caused us to think differently about our outlook for
In an effort to address speculation over whether licensed
partners, which include Starbucks and Dunkin Brands
, would continue as such given the expirations, Blanford
said all partners were still committed to multi-year agreements.
Green Mountain, which started as a small Vermont coffee
company, is also expanding beyond its core offerings,
introducing fruity "wellness" drinks with nutrients. It is also
working to move consumers to its new higher-end Vue system,
whose patents are still in effect, and unveiled a single-cup
espresso machine with Italy's Luigi Lavazza.
"As we look to the future, we remain committed to bringing
fresh ideas to light; pushing forward disruptive technologies;
and capturing true innovation," said Blanford.
Green Mountain shares jumped 22 percent to $35.36 after
hours, from their Nasdaq close on Tuesday at $28.95.