Specialty coffee retailer,
Green Mountain Coffee Roasters Inc.
), delivered robust fourth-quarter 2013 adjusted earnings
(excluding amortization of identifiable intangibles and
SEC-inquiry related expenses) of 89 cents per share, beating the
year-ago quarter earnings by 56%. It also beat the Zacks
Consensus Estimate of 74 cents by 20.3% and surpassed the
company's guidance of 69 cents-74 cents. The stellar growth was
on the back of solid top-line improvement and enhanced
Consolidated Revenues and Margins
GreenMountain's quarterly net sales rose 22.0% to $1.0 billion
from $856.7 million in the comparable prior-year quarter, backed
by 37% growth in the sales of brewers and accessories.
The U.S. business segment also backed net sales growth by 26%
during the fourth quarter. The Canadian business contributed 4%
to total sales during the quarter. Sales beat the Zacks Consensus
Estimate of $964 million.
Gross margin inflated 240 basis points (bps) to 36.0% due to
favorable green coffee costs, lower wastage cost of finished
goods and raw materials, lower warranty expense and labor and
overhead manufacturing costs.
Adjusted operating income went up 36% to $190.6 million.
Adjusted operating margin inflated 180 bps to 18.2% backed by
favorable green coffee costs and positive pricing.
Net sales of
Single Serve Packs
increased 23.0% year over year to $777.9 million due to a
substantial 29 percentage points surge in volume, partially
offset by mix and pricing headwinds.
Net sales of
Brewers and Accessories
gained 37.0% from the comparable prior-year quarter to $190.4
million mainly due to product mix backed by strong shipments and
Approximately 92% of fourth-quarter fiscal 2013 net sales was
contributed by the sales of KeurigSingle Cup Brewers, portion
packs and Keurig-related accessories, with the remainder coming
from bagged coffee, fractional packs and our Canadian office
coffee services business.
Net sales of
products slipped 10% to $78.9 million due to a demand shift from
traditional coffee package formats to single-serve packs.
Fiscal 2013 Results
During fiscal 2013, adjusted earnings (excluding amortization
of identifiable intangibles and SEC-inquiry related expenses) of
$3.39 per share beat the year-ago quarter's earnings by 45%. It
also beat the Zacks Consensus Estimate of $3.25 per share by 4.3%
and surpassed the company's guidance of $3.05 to $3.15. The
stellar growth was on the back of solid top-line expansion.
Net sales for fiscal 2013 rose 16.0% to $4.4 billion from $3.8
billion in the comparable prior-year quarter, backed by strong
sales growth of brewers and accessories. Sales beat the Zacks
Consensus Estimate of $4.3 billion.
Other Financial Details
Green Mountain announced a new share repurchase authorization
of up to $1 billion which will commence upon completion of the
company's current $500 million program.
Management believes that there are ample opportunities of
expanding its Keurig system in the domestic market. The company
has issued its outlook for fiscal 2014. Green Mountain expects
its adjusted earnings per share in the range of $3.75 to $3.85.
The company expects mid single-digit net sales growth over fiscal
2013. Free cash flow is estimated to be in the range of $200
GreenMountainalso provided its outlook for first-quarter 2014.
The company expects adjusted earnings per share in the range of
85 cents-90 cents and sales growth in the range of 12% to 18%.
The guidance reflects the company's continuous efforts to
increase brand investments and product innovations.
GMCR aims to achieve double-digit growth in annual revenues
and annual earnings growth in the mid-teens over the long
The Zacks Consensus Estimate for the first quarter and fiscal
2014 are pegged at 98 cents a share and $3.78 per share,
GreenMountaincurrently carries a Zacks Rank #2 (Buy). Other
consumer staples stocks worth considering are
Pinnacle Foods Inc. (
The JM Smucker Company (
Hain Celestial Group Inc.
). All these stocks carry a Zacks Rank #2.
GREEN MTN COFFE (GMCR): Free Stock Analysis
HAIN CELESTIAL (HAIN): Free Stock Analysis
PINNACLE FOODS (PF): Free Stock Analysis
SMUCKER JM (SJM): Free Stock Analysis Report
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