Keurig Line Drives Green Mountain to Huge Second Quarter
WATERBURY, Vt.-Big gains in sales of Keurig brewers and K-Cup portion packs boosted Green Mountain Coffee Roasters, the brand's parent, to major gains in its fiscal second quarter.
Net income finished the quarter, which ended on March 26, 172 percent above the profit total from last year's second quarter, to $65.4 million. Fueled by a 94 percent increase in K-Cup sales and an 86 percent rise in sales of Keurig Brewers, Green Mountain's net sales overall jumped 101 percent to $647.7 million.
Lawrence Blanford, president and CEO of Green Mountain, said second-quarter sales benefited from post-holiday brewer inventory levels in stores, along with "positive word of mouth from enthusiastic Keurig owners." The company's acquisition of Canada-based coffee roaster Van Houtte, which closed in December, contributed more than $100 million to Green Mountain's top line as well.
The company also added 400 basis points to its gross margin, which was 37.5 percent in the second quarter. Selling, general and administrative expenses rose 84 percent in the quarter in dollars, but dropped 112 basis points as a percentage of net sales to 12.3 percent.
As successful as the Keurig line has been, Blanford said there's more to come. "We believe we are in the early stages of potential Keurig system adoption in North America," he said. "The addition of leading, nationally recognized brands like Dunkin' Donuts, Starbucks and Swiss Miss to the Keurig single-cup brewing system expands customer choice within the system, fuels new excitement by current Keurig owners and users, raises system awareness and has the potential to attract new consumers to the system."