Green Mountain Coffee Roasters Earnings: Double-Digit Profit Growth

Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) reported higher profit for the second quarter as revenue showed growth. Green Mountain Coffee Roasters operates in the specialty coffee industry in the United States and internationally. It sells approximately 200 whole bean and ground coffee selections, cocoa, teas, and coffees.

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Green Mountain Coffee Roasters Earnings Cheat Sheet for the Second Quarter

Results: Net income for Green Mountain Coffee Roasters Inc. rose to $93 million (58 cents per share) vs. $65.4 million (44 cents per share) in the same quarter a year earlier. This marks a rise of 42.3% from the year-earlier quarter.

Revenue: Rose 36.7% to $885.1 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Green Mountain Coffee Roasters Inc. reported adjusted net income of 64 cents per share. By that measure, the company fell in line with the mean estimate of 64 cents per share. It fell short of the average revenue estimate of $971.7 million.

Quoting Management: “Over the past several years we achieved a strong net sales growth rate driven by consumers’ rapid acceptance of our innovative Keurig Single Cup Brewing system,” said Lawrence J. Blanford, GMCR’s president and CEO. “Additionally, during this timeframe we made a number of strategic acquisitions that strengthened our long-term position and contributed to our growth rate. During the second fiscal quarter our 37% net sales growth resulted from more consumers adopting the ease and convenience of Keurig’s Choose. Brew. Enjoy. approach to beverages. Despite lower-than-anticipated portion pack sales, and to a lesser degree, brewer sales, in the quarter we were able to control sales, general and administrative expenses enabling us to achieve non-GAAP earnings per share growth of 33%.”

Key Stats:

For the past five quarters, the company has seen double-digit year-over-year percentage revenue growth. Over that span, the company has averaged growth of 91.9%, with the biggest boost coming in the third quarter of the last fiscal year when revenue rose more than twofold from the year earlier quarter.

Gross margin shrank 2.1 percentage points to 35.4%. The contraction appeared to be driven by increased costs, which rose 41.3% from the year earlier quarter while revenue rose 36.7%.

The company met estimates last quarter after topping forecasts in the previous quarter with net income of 60 cents versus a mean estimate of net income of 36 cents per share.

Looking Forward: Over the past ninety days, the average estimate for the third quarter has fallen from 76 cents per share to 72 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. The average estimate for the fiscal year is $2.65 per share, a rise from $2.57 ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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