Green Mountain Coffee says TV ads and coffee machine sales will boost revenue
Green Mountain Coffee Roasters, Inc. (Nasdaq: GMCR) executives said strong sales of the company’s Keurig coffee machines and a $3 million advertising campaign will spur continued growth.
Green Mountain’s ad campaign will run in 15 markets during the holiday season, President Nick Lazaris said during the call. Lazaris said the company ran test advertisements previously and expects the new campaign to boost sales.
Green Mountain acquired Keurig Inc., a maker of premium coffee machines, during June of 2006. The Waterbury, Vt.-based company expects strong sales of the machines during 2007, Blanford said. Compared with the third quarter of 2006, the company shipped 41% more of Keurig’s K-Cups coffee systems. Also, Green Mountain’s sales team is targeting hotels for retailing in-room coffee machines, he said.
Revenue in the third quarter ended June 30 totaled $82.4 million, short of the $84 million expected by Wall Street but higher than $50.7 million a year earlier. Net income totaled $3.7 million, or $0.15 a share, compared with analysts’ expectations of $0.14 a share, and compared with $2.3 million, or $0.10 per share, in the year-ago period.
For the fourth quarter, the company reiterated in a statement that it expects revenue in the range of $83 million to $90 million, compared with $66.8 million a year earlier. The company expects fourth-quarter earnings in the range of $0.13 to $0.16 per share, compared with $0.19 in the same period of 2006. CFO Fran Rathke said the company’s earnings will be impacted by non-cash stock compensation expenses and amortization expenses, which are estimated to lower earnings by $0.06 per share.
For the full fiscal year ending in September, the company expects earnings in the range of $0.51 to $0.54 per share, compared with earnings of $0.36 per share in 2006 and analysts’ expectations of $0.53 per share.
During the third quarter, Green Mountain expanded its sales channels to 6,650, from 5,855 in the year-ago period. The company also shipped 13.6% more coffee than in the third quarter of 2006. Green Mountain saw increases in sales to all regions in the United States, but experienced a 4.3% decline in international revenue.
In midday trading, shares of the small-cap company are down $2.21, or 7.23%, at $28.34. Over the last 52 weeks, shares have fluctuated between $11.89 and $33.14.
