Caribou net down narrowly in Q3

by Eric Schroeder
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MINNEAPOLIS — Net income at Caribou Coffee Co. in the third quarter ended Sept. 30 was $1,722,000, equal to 9c per share on the common stock, down from $1,787,000, or 9c per share, in the same period a year ago.

Sales for the quarter were $77,242,000, down 5% from $81,439,000 during the same quarter of the previous year. Coffeehouse sales totaled $61,032,000 in the quarter, up 4% from $58,695,000 in the same period a year ago. Commercial sales fell 40% to $11,900,000, driven by a decrease in sales of blended coffee into the Keurig single-serve platform and related royalties, partially offset by increased sales to new and existing customers in the company’s grocery and food service channels.

“Our third-quarter performance was in-line with our expectations,” said Michael Tattersfield, president and chief executive officer. “We leveraged on-going product innovation and an unyielding focus on customer service to grow comparable coffeehouse sales of 3.5% in the quarter. We also opened 20 new coffeehouses in the quarter, six of which were company owned. We continue to focus on our multi-channel premium coffee business model to build the Caribou brand, and are confident in our ability to drive future growth across all of our lines of business.”

Subsequent to the third quarter, Mr. Tattersfield said Caribou sustained damage from Hurricane Sandy to a portion of its green coffee inventory that is being stored in a third-party warehouse in New Jersey.

“We are currently assessing the extent of the damage, including the reclamation and usability potential of the product, as well as possible avenues for recovery,” he said. “While this situation is rather unfortunate, we estimate our maximum liability will not exceed $5 million, and thankfully, our coffeehouse operations were not materially impacted by the storm.”

For the nine months ended Sept. 30, the company’s income declined 81% to $5,722,000, or 28c per share, which compared with $30,283,000, or $1.51 per share, during the same period of the previous year. Sales for the nine months were $238,908,000, up 2% from $233,984,000.

Looking ahead to fiscal 2013, Caribou said it expects net sales growth of approximately 6% to 8% and earnings-per-share of 52c to 55c.

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