Record Keurig brewer sales boost Green Mountain's first quarter

by Monica Watrous
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WATERBURY, VT. — Green Mountain Coffee Roasters, Inc. celebrated its best-ever holiday season with a 4% sales growth in the first quarter of fiscal 2014.

For the quarter ended Dec. 28, 2013, net income attributable to the company increased 28% to $138.2 million, equal to 91c per diluted share, compared with $107.6 million, or 70c per share, from the prior-year period.

Net sales climbed to $1,386.7 million from $1,339.1 million last year, driven by an 8% increase in pack-related net sales over the prior year and a record 5.1 million Keurig system brewers sold during the quarter.

Brewery and accessory net sales declined 1%, reflecting brewer product mix and a 21% decline in accessory net sales. Sales of other products dropped 18% compared to last year’s quarter, as consumers continue to shift from traditional coffee package formats to packs.

“We achieved record brewer volume, revenue and retail sell-through despite a challenging holiday season for many retailers, demonstrating the growing popularity of our Keurig brewing system among North American consumers,” said Brian Kelley, president and chief executive officer. “We believe these results will drive continued strong Keurig brewer installed base growth and future portion pack consumption.”

The company expects sales growth to accelerate moving into 2014 based on a higher installed base of Keurig brewers and the ongoing conversion and on-shelf availability of K-Cup packs converted from unlicensed to licensed partners. Additionally, Green Mountain recently unveiled Keurig 2.0, which brews both single-serve K-Cups and new K-Carafe packs that dispense 28-oz of coffee.

“We continue to expect net sales growth in the high single digits for fiscal year 2014 with some variability quarter-to-quarter as we work with our customers to manage the transition to our next generation Keurig 2.0 brewers and packs,” Mr. Kelley said.
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