Analyst sees "breakout year" in 2010 for Peet's

A Stifel Nicolaus & Co. analyst said Monday he believes 2010 will be a "breakout year" for specialty coffee retailer Peet's Coffee & Tea Inc., particularly in the grocery category.

Analyst Steve West said in a note to investors that he recently met with the company's Chief Financial Officer Tom Cawley who reaffirmed the company's 2009 guidance.

In February, Peet's said it expects to earn 94 cents to $1 per share for the year _ a rise of 17 percent to 25 percent from 2008's result. West expects earnings per share to grow 23 percent for the year.

West said the affirmation "gives us a great degree of confidence in our 2009 outlook."

The analyst said profit growth will likely be driven by the company's expanding grocery business. Peet's is expanding to sell its beans in about 1000 new grocery stores in 2009.

But he said much of the benefit of those initiatives may not be seen until 2010 due to discounting by competitors.

West has a "Hold" rating on the stock.

Peet's shares fell 16 cents to $21.54 in afternoon trading.