Caribou Coffee Company, Inc.
), the second largest premium coffeehouse operator in the United
States, posted adjusted earnings of 14 cents per share in the
fourth quarter of 2011, exceeding both the Zacks Consensus Estimate
and the year-ago quarter earnings by a penny. In fiscal 2011,
adjusted earnings stood at 42 cents per share versus 27 cents in
the prior year.
The company's sales during the quarter increased 18.8% to $92.5
million, aided by improved performance across all its business
lines. In fiscal 2011, revenue jumped 15.0% year over year to
Segment wise, Coffeehouse sales escalated 6.1% year over year to
$66.0 million during the quarter, driven by a 5.6% rise in
comparable coffeehouse sales. Commercial sales shot up 77.5% to
$23.3 million, due to higher sales from the Keurig single-serve
platform as well as existing and new customers. Franchise revenues
rose 24.6% to $3.3 million, attributable to higher product sales
Cost of sales and related occupancy cost increased 36.0% to
$49.6 million in the fourth quarter of 2011, driven by higher sales
in the quarter. Operating expense climbed 5.7% to $27.5 million,
attributable to unit growth and higher sales volume. General and
administrative expense fell 3.3% to $7.5 million, but depreciation
and amortization expenses upped 1.3% to $3.1 million.
Total operating income expanded 5.5% to $4.9 million, but
operating margin contracted 70 basis points (bps) to 5.3% due to
higher cost of sales and related occupancy cost.
During the quarter, Caribou Coffee opened 5 company-owned and 19
franchised-owned coffeehouses. The company also closed 2
company-owned coffeehouses. At the end of the quarter, the company
had 412 company-owned and 169 franchised coffeehouses.
Caribou Coffee ended the year with cash and cash equivalents of
$44.5 million and shareholders' equity of $101.3 million.
The Minneapolis, Minnesota-based company reaffirmed its
financial outlook for 2012. The company expects comparable sales
growth of 2% to 4% and adjusted earnings per share in the range of
48 cents to 51 cents. However, the company expects net sales growth
of 10%, lower than its previously expected range of 10% to 12%.
We expect estimates to increase for fiscal 2012 as the company
remains optimistic regarding growth across all the segments.
Caribou Coffee continues to focus on unit growth and plans to open
55 to 70 locations in 2012, implying an upside of 10% to 12%. The
Zacks Consensus Estimates for fiscal 2012 and 2013 are 50 cents and
66 cents per share, respectively, reflecting year-over-year growth
of 20.0% and 30.2%.
One of Caribou Coffee's competitors,
Texas Roadhouse Inc (
recently posted third quarter 2011 earnings of 22 cents, which
surpassed the Zacks Consensus Estimate of 19 cents and grew 15%
year over year. The higher-than-expected results were attributable
to lower-than-anticipated workers compensation expense, property
tax expense and income tax rate.
Caribou currently retains a Zacks #3 Rank, which translates into
a short-term Hold rating. We are maintaining our long-term Neutral
recommendation on the stock.
CARIBOU COFFEE (
): Free Stock Analysis Report
TEXAS ROADHOUSE (
): Free Stock Analysis Report
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