Source: Keurig Green Mountain.

For years, Keurig Green Mountain (UNKNOWN:GMCR.DL) has revolutionized the coffee industry, with its Keurig home-brewing machines becoming a staple in millions of homes in the U.S. and Canada. Yet with strong growth comes high expectations, and recently, Keurig Green Mountain has started to have some trouble living up to the vision of its future that its shareholders have of the company. Coming into its fiscal first-quarter report on Wednesday afternoon, Keurig Green Mountain had already convinced investors to expect less growth, but its financial results painted a much bleaker picture than they were prepared for. Let's take a closer look at how Keurig Green Mountain disappointed its shareholders with its results and what's next with how the company plans to keep moving forward in 2015 and beyond.

How Keurig Green Mountain's results ended up in the grinder

In terms of its bottom line, Keurig Green Mountain's fiscal first quarter didn't look all that bad, with adjusted earnings of $0.88 falling just a penny short of what most investors were looking for from the coffee giant. But the big surprise came on the revenue front, with net sales of $1.39 billion falling by a scant $300,000 from year-ago levels. Given that shareholders were looking for 6% growth, the roughly $80 million miss came as a shock.

Portion packs have been a key to Keurig's success.

Breaking down Keurig Green Mountain's results, the company posted solid growth of 9% in sales of portion packs, which make up the vast majority of its total revenue. The company even said that sales would have been higher except for the fact that some of its retail-store customers accelerated their purchases of portion packs last quarter, which cost the company about three percentage points of overall revenue growth.

Yet what really dragged down Keurig's results were slow sales of its brewer machines and accessories, which declined 18% from the year-ago quarter. The company sold 4.5 million Keurig brewers during the quarter, representing a 12% drop in sales volume, as poor sales of its MINI Plus brewer weighed on results. Pricing power for its brewers was also weak, and sales of accessories declined 15%. Sales of other products also fell 17%, although the company had largely anticipated that as part of the shift toward portion packs.

In addition, Keurig failed to convert on its international opportunities. U.S. sales rose 2%, but Canadian sales plunged 12%, with only half of that drop attributable to weakness in the Canadian dollar.

Despite the shortfall, Keurig Green Mountain management tried to put a positive spin on the results. CEO Brian Kelley reassured shareholders that "[w]e believe these factors are transitory and, while the impact to the holiday season for our hot platform was disappointing, we remain very enthusiastic about our opportunity to grow and premiumize at-home beverages," looking ahead to adding its cold-beverage machine in the near future.

Will 2015 be a disappointment for Keurig Green Mountain?

Yet Keurig's guidance for the remainder of fiscal 2015 raised new concerns about whether the coffee specialist will deliver the pace of growth that investors have come to expect. For the year, Keurig expects no more than high-single-digit percentage growth, standing in stark contrast to the 12% gains that shareholders had built into their expectations. Similarly, full-year earnings growth in the mid-single digits is a bit slower than the 7% growth projections that analysts had before the announcement.

Keurig will have a lot riding on its Keurig Cold machine. Image source: Keurig Green Mountain.

For the current quarter, growth guidance was more specifically troubling. Adjusted earnings per share between $1 and $1.05 look weak compared to the consensus figure of $1.18, and Keurig reminded investors that the big investment that Coca-Cola (NYSE:KO) made in the company comes at the price of potential dilution for existing shareholders.

The problem with slowing growth is that Keurig shares already carry a hefty valuation that's based in part on aggressive expansion prospects. Even with its stock having lost considerable ground coming into the earnings announcement, Keurig still trades at 25 times fiscal 2016 estimates. To live up to that valuation, Keurig can't afford to see sales slump this far for long.

Investors pummeled Keurig Green Mountain stock after the announcement, with shares falling more than 6% in the first half-hour of after-hours trading. Given the negative reaction, it's becoming increasingly clear that investors want to see Keurig Cold succeed before they make any huge bets on the stock. If the new machine has strong sales, though, then Keurig's stock could heat back up in a hurry.