Peet's Coffee & Tea Inc.
(
PEET
), one of the world's leading specialty coffee roaster and marketer
of fresh roasted whole bean coffee, is scheduled to report its
fourth-quarter and fiscal year 2011 financial results on February
15, 2012.
The current Zacks Consensus Estimate for the fourth quarter is
pegged at 43 cents a share, while it is $1.50 per share for the
fiscal year 2011. The Zacks Consensus Estimate projects revenues
for the quarter to be $103 million, while $373 million for the
fiscal year 2011.
Third Quarter 2011 Recaps
Peet's, which faces stiff competition from
Green Mountain Coffee Roasters Inc.
(
GMCR
) and
Starbucks Corporation
(
SBUX
), posted robust results for the third quarter of 2011 as earnings
of 28 cents per share surpassed the Zacks Consensus Estimate by a
penny, while they were in line with the prior-year period
earnings.
The company also affirmed its 2011 earnings to be at the higher
end of the previous guidance range of $1.43 to $1.50. In addition,
Peet's expected its 2011 reported earnings to be at the higher end
of the $1.27 to $1.34 range, including litigation-related expenses
of 16 cents per share.
Further, Peet's anticipates that its 2012 earnings would be in
the range of $1.70 to $1.80. The current Zacks Consensus Estimate
for fiscal 2012 is $1.79.
Earnings were primarily impacted by strong performance of the
grocery business, reporting a 38% year-over-year growth, as well as
good sales improvement in all segments.
Net sales climbed 14.0% to $91.2 million in the quarter from
$80.2 million in prior-year quarter, demonstrating strong
fundamentals and business growth.The company thus affirmed its
total net revenue growth guidance to be in the range of 10% to 12%
for fiscal 2011. It also expects net revenue to grow around 10% for
2012.
Agreement with Analysts
The analysts expect Peet's to either follow the trend of beating
its earnings estimates or remain in line with the estimates, as it
has been doing for the last four quarters. Though the analysts have
not revised their estimates in the last one month for the current
quarter and fiscal year 2011, there is a slight upside trend in the
fiscal year 2012, which justifies a neutral sentiment on the
stock.
Out of the 8 analysts providing estimates for both the current
and the next year, none changed their estimates on the stock over
the past one month. The trend indicates no clear directional
movement for the upcoming quarters and signifies that the analysts
are circumspect about the long-term trend earnings of the
company.
Magnitude of Estimate Revisions
Over the past 30 days, the estimate for Peet's remained
unchanged at 43 cents for the current quarter and at $1.50 per
share for the fiscal year 2011. The estimates, however, decreased
for the next quarter by a penny to 38 cents and increased for the
fiscal year 2012 by a penny to $1.79 per share.
Earnings Surprise
With respect to earnings surprises, Peet's has topped the Zacks
Consensus Estimate in three of the last four quarters, while Peet's
estimates remained in line with the Zacks Consensus Estimate in one
quarter. Over the last four quarters, the earnings surprise ranged
from a positive 0.00% to a positive of 20.59%, with the average
earnings surprise being 14.35%, suggesting that Peet's has
outperformed the Zacks Consensus Estimate.
Recommendation
Peet's Coffee & Tea is a growing company. The company's high
quality standard and its variety are maintained by its vertically
integrated business model. Further, management expects momentum and
plenty of new growth opportunities for the company. It expects to
deliver strong sales and earnings growth, while continuing to
invest in and explore additional growth initiatives.
However, the highly competitive nature of specialty coffee
category and the vulnerability of coffee prices to weather and
damage by pests concern us.
Currently, Peet's holds the Zacks #3 Rank, which translates into
a short-term Hold rating. Over the long term, we prefer to rate the
stock as Neutral.
GREEN MTN COFFE (
GMCR
): Free Stock Analysis Report
PEETS COFFE&TEA (
PEET
): Free Stock Analysis Report
STARBUCKS CORP (
SBUX
): Free Stock Analysis Report
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