Keurig Green Mountain (GMCR) Tops Q3 EPS by 1c, Q4 EPS Guidance Falls Short

Keurig Green Mountain (NASDAQ: GMCR) reported Q3 EPS of $0.80, $0.01 better than the analyst estimate of $0.79. Revenue for the quarter came in at $970 million versus the consensus estimate of $1.04 billion.

Fourth Quarter 2015

• Net sales growth decline of low-teens compared to the fourth quarter of fiscal year 2014
• An effective tax rate of approximately 36% to 36.5%
• Non-GAAP EPS in a range of $0.70 to $0.75 which:
  • Includes an estimated $0.03 headwind from foreign currency exchange
  • Excludes any restructuring or one-time charges related to the Company’s productivity initiative
  • Excludes the amortization of identifiable intangibles related to the Company’s acquisitions and legal and accounting expenses related to the Company’s pending securities and stockholder derivative class action litigation and antitrust litigation

(Consensus calls for Q4 EPS of $0.97 on revenue of $1.21 billion)

“While we are not pleased with our revenue growth, we delivered earnings at the high end of our previous guidance,” commented President and CEO, Brian Kelley. “We are taking decisive actions to adapt and compete more effectively in today’s rapidly-evolving, dynamic marketplace. We are implementing a multi-year productivity program that we are confident will enhance our operational effectiveness and enable us to fund incremental investment in innovation and brand building. In addition, our new Keurig K200 brewer is off to a strong start with its introduction this past quarter. We believe this addition, as well as the enhancements we’ve made to our entire At Home brewer line up will allow for continued growth in our U.S. installed base. We continue to believe that our hot system has the potential to reach more than 50 million U.S. households over time --more than double its size today. In addition, the upcoming launch of our Keurig KOLD system creates an even larger opportunity for long-term growth and value creation.”

Mr. Kelley continued, “Going forward, we will continue to maintain a strong, flexible capital structure and balance sheet to enable us to return significant value to our shareholders as we continue to invest in the business. Underscoring our commitment to delivering value to our shareholders, today we announced that our Board authorized an additional $1 billion share repurchase which adds to our existing plan. With innovative technology and a premier beverage brands portfolio, Keurig continues to be a recognized leader in the industry and we are confident we will continue our legacy of delivering disruptive and innovative products for the benefit of all Keurig constituents.”

For earnings history and earnings-related data on Keurig Green Mountain (GMCR) click here.

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