Shares of Keurig Green Mountain surged by as much as 20% in after-hours trading on Wednesday after the company reported fiscal-fourth-quarter results that beat expectations, and an increase in dividends.
The company’s stock has fallen more than 60% this year amid a plunge in sales.
The specialty-coffee maker reported a 13% drop in net sales to $US1.04 billion during the quarter, although this still beat analysts’ forecast for $US1.03 billion, according to Bloomberg.
Earnings per share came in at $US0.85, above the estimate for $US0.70.
The company’s board authorised a 13% increase in dividends.
Earlier this year, Keurig announced plans to lay off workers to cut costs.
CEO Brian Kelley said in the earnings statement: “I’m particularly pleased with the benefits realised from our cost reduction efforts as well as our strong cash generation, both of which exceeded expectations in the fourth quarter. While we expect marketplace conditions will remain challenging in the near term, we have a stronger product line-up and price positioning as we enter the new holiday season.”
The company plans to roll out the Keurig Kold, a single-serve brewer for beverages including sodas and iced tea, amid sliding soda sales in the US. The success of this product is crucial, following weak sales of the Keurig 2.0 model after customers discovered that it only worked with certain K-Cups.
In Q4, sales in every product category were lower compared to the same period last year. Net sales from pods fell 9% to $US861.2 million, and 32% to $US123.6 million in the brewers and accessories category.
The company sold two million Keurig brewers during the quarter.
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