Keurig Green Mountain just reported first quarter earnings and the company’s sales during the quarter were a big miss.
In the first quarter, revenue totaled $US1.39 billion, missing Wall Street expectations for $US1.5 billion.
The company attributed the revenue miss to weaker than expected holiday season for brewers than expected.
First quarter earnings were just below expectations, coming in at $US0.88 against estimates for $US0.89.
In after hours trade on Wednesday, the stock was down as much as 8%.
Keurig CEO Brian Kelley said in the company’s earnings announcement:
Revenue came in below our expectations primarily due to a weaker than expected holiday season for brewers, including the effect of the voluntary recall on certain MINI Plus brewers, and greater than expected retailer portion pack inventory reductions. We believe these factors are transitory and, while the impact to the holiday season for our hot platform was disappointing, we remain very enthusiastic about our opportunity to grow and premiumize at-home beverages across both our hot and cold platforms.
Keurig also gave a second quarter adjusted earnings per share view that came in below expectations and slashed its fiscal year 2015 outlook for earnings and revenue.
In the upcoming year, Keurig sees sales rising by mid- to high-single digits over 2014. Previously the company had expected sales to rise by high-single to low-double digits.
The K-Cup maker did reaffirms its free cash flow and capital investment forecasts.