WATERBURY, Vt.-With Keurig-branded single-serve packs retaining their sales momentum, parent company Green Mountain Coffee Roasters (GMCR) enjoyed a 42.3 percent gain in second-quarter net income, to $132.4 million.
Overall net sales in the quarter, which ended on March 30, rose 13.5 percent to $1 billion. Much of the gain was realized from sales of Keurig’s single-serve K-Cup packs, whose sales jumped 21 percent. Sales of Keurig brewers and accessories actually fell 10 percent in the quarter.
The Keurig performance helped bring “strong earnings growth and significant free cash-flow generation,” said Brian Kelley, GMCR president and CEO. “Our fiscal second-quarter results demonstrate the leverage inherent in our business model,” Kelley said.
GMCR’s bottom line also got a boost from the 595 basis-point increase in gross margin, which finished the quarter at 41.3 percent. Operating expenses rose 24.2 percent in dollars and 174 basis points as a percentage of sales, to 20.2 percent.
Looking ahead, Kelley said, “We expect the Keurig brewer installed base in U.S. households to grow between 25 percent to 30 percent in fiscal 2013, with volume of our single-serve packs growing proportionately with the anticipated brewer installed base.”