Green Mountain Coffee Earnings Are Out And It Cuts Its Forecast

Photo: Toby Talbot/AP Images

UPDATE (4:00 p.m.):Green Mountain Coffee Roasters cut its full year sales forecasts this afternoon, after the company reported it beat the Street’s bottom line expectations.

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The Waterbury, Vermont, based coffee producer said it would now tally revenue between $3.79 and $3.84 billion for its fiscal 2012 calendar, which ends in September.

That falls below previous estimates the company made in May, when it forecast sales could top $4.0 billion. 

Earnings are also expected to come in sharply below guidance issued earlier this year, with Green Mountain now forecasting earnings per share between $2.21 to $2.26 per diluted share. That’s roughly 10 per cent lower than earlier targets it set.

“As we become larger … our sales growth trajectory will understandably moderate from hyper-growth to a level more in-line with other successful growth businesses,” Chief Executive Lawrence Blanford said. 

For its third quarter, Green Mountain said it earned net income of $73.3 million, or $0.52 per share, marginally ahead of forecasts for $0.50.

Sales were weaker than anticipated, even as they improved 21 per cent to $869.2 million. That was $4.1 million below estimates.

K-Cups, which drive nearly 74 per cent of the company’s revenue stream, advanced 31 per cent, compared to a 59 per cent gain just one quarter earlier.

That slowdown weighed on margins, pushing it 190 basis points lower to 34.9 per cent. Green Mountain also blamed lower margins on inventory buildup and “obsolescence,” or coffee it is forced to throw out because it sits at its distribution plant too long and spoils.

Green Mountain’s board also authorised a $500 million share buyback.

Shares fell more than 12 per cent in after hours trade.


Green Mountain Coffee Roasters is expected to post a strong double-digit sales growth when it announces third quarter earnings after the closing bell today.

Analysts polled by Bloomberg forecast the firm will report earnings per share of $0.50 on revenue of $873.3 million, translating to 21.7 per cent sales growth.

The company has guided for higher revenue power, but analysts have clustered lower.

Business Insider will be covering the company’s results live, as they announce. Refresh your page or click the link at the top of the page.

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