Caribou Coffee Company, Inc.
), the second largest premium coffeehouse operator in the United
States, posted earnings of 13 cents per share in the second quarter
of 2012, surpassing the Zacks Consensus Estimate of 10 cents, but
in line with the year-ago quarter adjusted earnings of 8 cents.
The company's sales during the quarter inched up 1.1% to $81.1
million, aided by 11 consecutive quarters of growth in comparable
coffeehouse sales and continuous expansion of franchise in
Segment wise, Coffeehouse sales crept up 3.3% year over year to
$62.0 million during the quarter, driven by a 3.3% rise in
comparable coffeehouse sales. The increase in comparable
coffeehouse sales was driven by higher traffic and favorable
beverages sales mix. Commercial sales fell 7.9% to $15.5 million,
on the back of drop in sales from the Keurig single-serve platform
and royalties, partially offset by higher sales from existing and
new customers in the foodservice and grocery channels. Franchise
revenues rose 6.0% to $3.6 million, attributable to unit growth and
higher product sales and royalties.
Cost of sales and related occupancy cost increased 5.0% to $39.8
million in the second quarter of 2012, driven by increased
commodity costs. Operating expenses slipped 1.6% to $26.4 million,
attributable to lower labor costs. General and administrative
expense fell 7.0% to $7.6 million and depreciation and amortization
expenses were down $0.3 million to $2.5 million.
Total operating income jumped 5.7% to $4.9 million, while
operating margin expanded 20 basis points (bps) to 6.0%, due to
lower operating, general and administrative and depreciation and
Caribou Coffee ended the year with cash and cash equivalents of
$36.9 million and shareholders' equity of $97.8 million.
The Minneapolis, Minnesota-based company trimmed its financial
outlook for 2012 based on decline in sales related to its Green
Mountain relationship. The company expects earnings per share in
the range of 43 cents to 46 cents compared with the earlier
expectations of 47 cents to 50 cents. Moreover, the company
anticipates net sales to be flat year over year, lower than it's
previous expectation of growth in the range of 6% to 8%.
With the company lowering its outlook for fiscal 2012, we expect
estimates to dip for the same. Moreover, food cost pressure will
continue to be a headwind. However, to drive sales, Caribou Coffee
remains focused on introducing innovative food and beverage
products in the retail coffeehouses. The company also continues to
drive growth by unit expansion and plans to open 60 to 70 locations
in 2012, of which 15 will be company-owned coffeehouse openings.
The Zacks Consensus Estimates for fiscal 2012 and 2013 are 45 cents
and 62 cents per share, respectively, reflecting year-over-year
growth of 6.0% and 8.2%.
One of Caribou Coffee's competitors,
Panera Bread Co.
) posted second quarter 2012 adjusted earnings of $1.50 per share,
comfortably surpassing the Zacks Consensus Estimate of $1.39 and
year-ago-quarter's earnings of $1.18.
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 (CBOU): Free Stock Analysis
PANERA BREAD CO (PNRA): Free Stock Analysis
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