Net income for Green Mountain Coffee Roasters, Inc. rose 42% during the second quarter of fiscal 2013, ended March 30. The company said growth of its single-serve platform propelled earnings and management expressed optimism that the momentum would carry into the third quarter.
Net income for the quarter was $132.4 million, equal to 87c per share on the common stock. Sales for the quarter increased to $1,004.8 million, up 14% from the same period of the previous year.
“Our industry-leading single serve business — made up of single-serve packs, Keurig brewers and accessories — grew a healthy 16% in our second fiscal quarter contributing to strong earnings growth and significant free cash flow generation,” said Brian P. Kelley, president and chief executive officer. “We expect the Keurig brewer installed base in U.S. households to grow between 25% to 30% in fiscal 2013, with volume of our single-serve packs growing proportionately with the anticipated brewer installed base.”
Sales of single-serve packs rose 21% during the quarter to $794 million. Sales of brewers and accessories fell 10% to $126.8 million during the quarter.
“With only 13% estimated U.S. household penetration of our Keurig system, we believe there is considerable opportunity for strong continued growth,” Mr. Kelley said. “Already, Keurig is the brand synonymous with single-serve coffee in the hearts and minds of North American consumers. We continue to build awareness of our Keurig beverage system where it matters most: in the home, in the office, on the counter, one cup at a time.”
“We are also pursuing new channels, new brands, new beverages, new geographies and new brewer technologies to drive incremental growth. When combined with continued improvements in our operations, we believe these efforts will enable us to generate sustainable sales and earnings growth over the long term.”
Green Mountain Coffee Roasters and the Starbucks Coffee Co., Seattle, also announced that they have entered into an agreement that expands manufacturing and marketing of Starbucks- and Tazo-branded single-serve packs for use in Keurig single-serve systems. The two companies initially entered into the agreement in March 2011. Since then more than 850 million Starbucks K-Cup packs have been sold.
Under the new agreement, Starbucks will add brands and varietals to its portfolio of single-serve offerings. New brands will include Seattle’s Best Coffee, Torrefazione Italia coffee, Teavana Teas and Starbucks Cocoa.
“Starbucks new agreement with G.M.C.R. strengthens our leadership position in the premium single cup category, the segment of our industry that has grown nine times faster than the overall coffee category during the past year and a category that now accounts for more than 25% of total coffee sales in grocery,” said Howard Schultz, Starbucks chairman, president and c.e.o.
