Green Mountain Earnings Beats Estimates - Analyst Blog
May 09 2013 - 4:24AM
Zacks
Specialty coffee retailer, Green Mountain Coffee
Roasters Inc. (GMCR), delivered robust 2013-second-quarter
adjusted earnings (excluding amortization of identifiable
intangibles and SEC-inquiry related expenses) of 93 cents per share
that surpassed the year-ago quarter earnings of 64 cents by 45%. It
also beat the Zacks Consensus Estimate of 73 cents by 27.4% on the
back of solid top line growth and lower interest expense.
Consolidated Revenues and Margins
GreenMountain’s quarterly net sales rose 14% to $1.0 billion
from $885.1 million in the comparable prior-year quarter, backed by
a 16% sales growth of Keurig Single Cup Brewers, single serve packs
(K-cups) and Keurig related accessories.
Gross profit increased 32.6% to $415.1 million. The reported
gross margin went up 590 basis points to 41.3% due to favorable
green coffee costs, lower wastage cost of finished goods and raw
materials, lower labor and overhead manufacturing costs.
Net sales of Single Serve Packs increased 21.2%
year over year to $794.0 million, fuelled by a substantial
26-percentage points surge in volume, partially offset by mix and
pricing headwinds.
Net sales of Brewers and Accessories
slipped 10.1% from the comparable prior-year quarter to $126.8
million. Approximately 1.36 million brewers were sold during the
period (9% lower shipments than the year-ago quarter), out of
which, 1.23 million Keurig Single Cup Brewers were sold by Green
Mountain and the rest by the company’s licensed brewer
partners.
Net sales of Other products slipped 7% to $84.0
million due to demand shift from traditional coffee package formats
to single serve packs.
Guidance
Management believes that there are ample opportunities of
expanding its Keurig system in the domestic market. The company has
raised its adjusted earnings per share outlook and capital
investment for fiscal 2013, but reiterated its net sales growth and
free cash flow estimates. Green Mountain expects its adjusted
earnings in the range of $3.05 to $3.15 per share, up from the
prior guidance of $2.72 to $2.82 per share.
The company expects net sales growth in the range of 11%–14%
over fiscal 2012 compared to 15%–20% as announced previously. Free
cash flow is estimated to be in the range of $300 million–$400
million compared to $100 million–$150 million as expected
previously. Capital expenditure is expected in the range of $275
million to $325 million, higher than the prior estimate of $350
million to $400 million.
GreenMountainalso provided its outlook for second-quarter 2013.
For the second quarter, the company expects adjusted earnings per
share in the range of 71 cents–78 cents and sales growth in the
range of 11% to 15%. The guidance reflects the company’s continuous
efforts to increase brand investments and product innovations.
The Zacks Consensus Estimates for the second quarter and fiscal
2013 are pegged at 66 cents and $2.84 per share, respectively.
GreenMountaincurrently carries a Zacks Rank #1 (Strong Buy). If
you are looking for a diversified retailer, it might not be a bad
idea to check out The TJX Company (TJX),
Costco Corporation (COST) and Gap
Inc. (GPS) all with a Zacks Rank #2 (Buy).
COSTCO WHOLE CP (COST): Free Stock Analysis Report
GREEN MTN COFFE (GMCR): Free Stock Analysis Report
GAP INC (GPS): Free Stock Analysis Report
TJX COS INC NEW (TJX): Free Stock Analysis Report
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