Keurig Net Slips in Q1
WATERBURY, Vt.-With sales coming in below the company’s expectations, first-quarter net income for Keurig Green Mountain dropped 2.6 percent to $134.6 million.
Net sales in the quarter, which ended on Dec. 27, totaled $1.4 billion, flat with the first quarter of last year. Sales of brewers and accessories fell 18 percent in the quarter, offsetting a 9 percent pickup in sales of portion packs. Weaker sales of Mini Plus brewers were a major cause of the overall sales shortfall in the category.
Gross margin finished the quarter at 33.5 percent, relatively flat with last year. Selling, general and administrative expenses rose 4.5 percent in dollars and 78 basis points as a percentage of sales, to 17.9 percent.
Brian Kelley, Keurig’s president and CEO, said the holiday sales period turned out to be less successful for the brewers than was projected by the company, along with a voluntary recall of certain Mini Plus brewers. However, “we remain very enthusiastic about our opportunity to grow and premiumize at-home beverages across both our hot and cold platforms,” Kelley said.