Scary Caribou

Now here's a strange trend -- coffee companies that seemingly elicit far more optimism from investors than Starbucks (NASDAQ:SBUX). Is Caribou (NASDAQ:CBOU) the latest example?

Caribou's stock had jumped 27% when I checked it a few minutes ago -- of course, it's trading at around $2 a share, so that seemingly huge surge doesn't actually represent much. At any rate, Caribou managed to narrow its second-quarter loss to $2.5 million, or $0.13 per share, from a loss of $3.9 million, or $0.20 per share, this time last year.

Revenue increased an anemic 0.5% to $63.2 million, saved by "Other Sales," which increased by 68%. These represented commercial customers, royalties, and product sales from franchise cafes opened in the last year. Same-store sales decreased 1.7%.

Starbucks may be closing some stores because of lagging consumer spending and overexpansion, but Caribou's also shuttering some stores, even though you'd be hard pressed to accuse it of having overexpanded at all. The company has a total of 490 coffeehouses, and 75 of them are franchised locations.

I've long been bearish on Caribou. I can see why investors might be sweet on Peet's (NASDAQ:PEET), and find Starbucks a bargain at current levels. Green Mountain Coffee Roasters (NASDAQ:GMCR) stock has also been a winner, even though it's about beans and single-serve at-home brewing instead of sit-down coffeehouses.

Contemplating the universe of potential coffee stocks, Caribou scares me the most. Starbucks may have recently treated us to its first quarterly net loss, but that's old hat to Caribou. I glanced over its last five years of financial data, and Caribou has not reported an annual profit in that entire time. The news that it has narrowed its second-quarter loss is certainly better than if it had widened it, but to my way of thinking, that doesn't make up for the risk inherent in its historical lack of profitability.

Lots of companies serve as competitors in the battle to win consumers' coffee habits -- McDonald's (NYSE:MCD) and Dunkin' Donuts are in the fray, and of course, many of us forget old coffee standbys like Sara Lee (NYSE:SLE) and Procter & Gamble (NYSE:PG).

However, when it comes to hot coffee plays for investors' portfolios, I think Caribou could be the most likely culprit for investors to get burned. Watch your lap.  

Pour yourself a cup of related Foolishness:

• Investors were sweet on Peet's after its most recent quarterly results.
• Starbucks' latest first was, unfortunately, its first quarterly net loss.
• Last February, I took a look at a pot of coffee stocks.