Green Mountain Coffee Shares Surge On Earnings Report
11/28/12 9:54AM By Steve Zind
, which last year Green Mountain Coffee Roastersbecame Vermont's largest business, has had its troubles in the past two years, including an inquiry by the Securities and Exchange Commission and a number of shareholder lawsuits.
The Waterbury company pioneered the now popular single serving Keurig system. But increased competition in the K-cup market and the recent expiration of key patents have raised questions about its future performance, as stock prices fell 60 percent over a nine-month period in 2012.
However, Green Mountain Coffee Roasters shares gained ground late Tuesday and early Wednesday on the heels of a fiscal fourth quarter performance that far exceeded expectations. Shares closed at $36.86 on Wednesday, up nearl $8 per share over the course of the day.
The performance was driven largely by continued strong K-cup sales. "We believe GMCR will continue to be the leader in single serving beverages for the K-cup brewing platform," said outgoing CEO and President Larry Blanford.
Blanford says the company is well positioned thanks to the wide range of brands and varieties it manufactures and key partnerships, including recently announced agreements with Snapple to produce single serving ice teas and the warehouse giant Costco for production of Kirkland brand coffee.
The company also expects continued growth in the share of non-coffee K cup beverages, which currently make up approximately 14 percent of sales.
Blanford said in the future, "We continue to believe we will deliver annual sales growth in the range of 15 percent to 20 percent with annual earning growth in the mid-teens over the longer term."
Green Mountain Coffee Roasters recently announced the appointment of former Coca Cola executive Brian Kelley to replace Blanford beginning December 3.
Blanford lauded the company's growth during his tenure, "from several hundred million dollars of sales to several billions, from less than 1,000 employees to nearly 6,000."