Things looked pretty bleak for
Green Mountain Coffee Roasters (
two months ago.
, the global coffee king, announced in late September that it was
entering the single-serve coffee market - a space Green Mountain
has dominated. GMCR shares declined 24% in a matter of a week. I
wondered whether the move might be a "
" for the Vermont-based specialty coffee company.
Now, it appears, Green Mountain is back from the dead.
GMCR shares have risen more than 25% this morning after the
company managed to blow analyst estimates out of the water in its
fiscal fourth-quarter earnings report. Net income, excluding
items, was 64 cents a share - well ahead of the 48 cents per
share analysts were expecting.
Meanwhile, quarterly sales and next year's earnings forecasts
Net sales for the quarter ended September 29 increased 33%
from a year ago, outpacing analyst estimates by $44 million. And
the company raised its projected earnings for its new fiscal year
to a high of $2.74 a share, up from a high of $2.65 per share
The brighter earnings forecast is especially encouraging given
all the investor consternation about Starbucks entering the
single-serve coffee fray. That Green Mountain expects sales to
improve even as its Keurig machine is getting some added
competition from Starbucks' Verismo is a testament to the
company's firm grasp on the single-serve market.
At present, Green Mountain Coffee occupies roughly 90% of the
single-serve coffee market.
Having risen to about $36 a share today, GMCR's stock is
suddenly the highest it's been since May 2. Shares are still
trading for roughly
of their $111 peak in September 2011.
But considering the stock dropped all the way to $17 a share
less than three months ago, today's move is a major step forward
for a company that's proving to be more resilient than some