Wednesday, November 28, 2012

Green Mountain Plunges 30% After Earnings; “No Misconduct”

Green Mountain Coffee Roasters (GMCR) fell off a cliff, or off of a green mountain, or whatever metaphor you’d like to use, in after-hours trading, as the coffee company missed earnings and revenue expectations. Shares fell 30%, and were more recently down 24%.

GMCR posted47 cents of EPS, a penny below expectations. The company’s $711.9 million in revenue (91% year over year growth) was below the company’s own expectations, and below consensus estimates for $760.5 million.

It’s the first revenue miss in two years, the Wall Street Journal notes.

“Our fiscal fourth quarter revenue growth of 91% was strong. This was off of our estimates as a result of a number of factors including changes in wholesale customer ordering patterns in our grocery and club channels despite steady consumer point-of-sale demand in those channels,” said CEO Lawrence Blanford.

GMCR also saw inventory rise to $672 million from $263 million a year ago; the company attributed the increase to higher green coffee volumes and prices, and a larger inventory of both K-cup packets and Keurig brewers.

“We’re well-stocked for what we expect to have a very strong holiday season,” the company’s management said on the conference call.

Green Mountain also noted an increase in debt outstanding to $582.6 million from $354.5 million a year ago “as a result of an increase in the long-term revolver.”

Green Mountain has mostly been in a tailspin since activist investor David Einhorn called its accounting into question at a conference last month.

In response to “recent allegations of misconduct,” Blanford saidon the call that the audit committee has found that “there is no misconduct, there is no wrongdoing.”

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