* Sales to start Tuesday, June 12
* Starbucks expects K-cups to boost FY12 EPS by 3-5 cents
* Shares in Starbucks, Green Mountain up modestly
By Lisa Baertlein
June 7 U.S. Starbucks Corp stores will
begin selling single-serve K-Cup coffee pods for Green Mountain
Coffee Roasters Inc's popular Keurig brewers on June
12, the company told Reuters on Thursday.
The move, which comes months earlier than some on Wall
Street had expected, will expand points of sale to most of the
company's roughly 11,000 U.S. shops and should help boost
results at both Starbucks and Green Mountain.
Single-cup brewers make fresh cups of coffee, or even
espresso drinks, in seconds. The single-cup category is small
compared with the overall coffee sector, but growing rapidly.
Due to strong sales through grocery stores, retailers like
Target Corp and Starbucks own online store, executives
from the world's biggest coffee chain in April said the
contribution from K-Cups to this fiscal year's profit could come
in at the top end of the forecasted range of 3 to 5 cents.
"From Starbucks' perspective, we view the
earlier-than-expected roll out as a positive," Janney Capital
Markets analyst Mark Kalinowski said in a client note.
"That said, keep in mind that marketing spend by Starbucks
regarding K-Cups could be heavy, and as such, this could place a
lid on the ultimate EPS upside potential from K-Cups both for
the remainder of fiscal 2012 and for fiscal 2013 as a whole," he
The move also should benefit Green Mountain during a
typically slower seasonal period for coffee, Kalinowski said.
Green Mountain gets the bulk of its profits from K-Cup
Shares in Starbucks were up 1.4 percent to $54.23, while
Green Mountain was up 0.3 percent to $24.59.