Glance at a five-year chart for Green Mountain Coffee Roasters
Second-quarter net income surged 90% to $24.7 million, or $0.54 per share. Revenue rocketed 68% higher, to $324.9 million. Green Mountain was also able to improve gross margin to 33.4%, from 32.1% a year ago.
In more great news, the company said K-Cup sales were up 92%, while demand for its single-serve Keurig brewers is still going strong. It shipped 731,000 of the brewers, compared to 486,000 this time last year.
Green Mountain has been a highly caffeinated stock in recent years. Despite competition from usual suspects such as Starbucks
Green Mountain also declared a 3-for-1 stock split. Savvy Fools know that stock splits don't really signify much, beyond creating a psychological impression that a stock is cheap.
But despite this quarter's aromatic earnings, Green Mountain's weaker-than-expected outlook left investors with a bitter taste in their mouths. The company said it now expects third-quarter earnings of $0.50 to $0.54 per share, well below analysts' estimates of $0.57. (Those figures are pre-split, by the way.)
Green Mountain's sliding stock price isn't too surprising, given the lackluster news. Shares are down about 26% from its 52-week high. As Buffalo Wild Wings'
There's no reason for longtime shareholders to flip out and sell, but I wouldn't want to buy shares now, either. Even with the retreat in its price, I still say "buyer beware" on Green Mountain. It'd have to be a lot more reasonably priced to please my palate.
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