Green Mountain Coffee Roasters Q1 2013 Earnings Recap

Seth Golden profile picture
Seth Golden

Green Mountain Coffee Roasters (NASDAQ:GMCR) reported a beat across the board when it reported Q1 2013 earnings results on February 6, 2013. The stock tumbled upon earnings release as investors likely shared in a healthy bout of profit taking that saw the stock climb almost 10% in as little as five trading sessions leading up to earnings. For the quarter, the company reported $.76 in earnings per share against Wall Street's expectations of $.65 a share. The company accomplished this outsized beat on earnings by achieving a 16% increase in net sales, an increase of 14% in brewer and accessory sales and an increase of 21% in single serve packs.

The big achievement from an investor's perspective came in the form of free cash flow as the company was able to produce $254 million in free cash flow during the quarter, driven mostly by increased revenues. Also of great importance, free cash flow generated in the quarter highlights lower brewer inventory in Q1 as is typically the case for the company.

Moving forward, the company offered investors an optimistic projection for Q2 2013 with net sales expected to climb in the range of 14-18% and earnings per share outlook of $.70-$.75 a share. For FY13 the company has broadened its outlook on earnings to $2.72-$2.84 a share. Additionally, the company has curtailed its capex guidance to $350 million to $400 million from the prior range of $380 million to $430 million. With the lowered capex spend on the year; the company now expects to come in at the higher end of the range with regards to forecasting $100-$150 million in free cash flow.

As we look at the entirety of the quarterly results and FY projections, our assessment of the company to proficiently build upon its recent successes should bear fruits

This article was written by

Seth Golden profile picture
Formerly Chief Market Strategist at Capital Ladders Advisory Group LLC. After the sale of certain of CLAG's retail and institutional assets in October 2015, I have commenced my latest venture in the CPG industry which is centered on the development and licensing of consumer and commercial technology. CooLinX Integrated Technologies develops technologies for the beverage and CPG industry. We are presently effecting licensing agreements with multi-national brands and co-developing products aimed for mass market consumption.

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