Peet’s Coffee & Tea, Inc. Reports 12 Percent Net Revenue Gain In Second Quarter

Peet's Coffee & Tea, Inc. announced its second quarter results for the fiscal period ended July 3, 2011, which included 13 weeks.

For the 13 weeks ended July 3, 2011, net revenue increased 12 percent to $90.6 million from $80.8 million for the corresponding period of fiscal 2010.

Net income for the 13 weeks ended July 3, 2011, was $5.1 million compared to $4.3 million for the corresponding 13-week period of fiscal 2010. Diluted earnings per share was $0.38 for the 13-week period of fiscal 2011 compared to $0.31 per share for the corresponding period of fiscal 2010, an increase of 23 percent.

"Our business performance continued to be very strong in the second quarter," said Patrick O'Dea, president and CEO of Peet's Coffee & Tea in a prepared statement. "Sales were healthy across all of our channels, particularly in our grocery business, which grew 30 percent. Looking ahead to the balance of the year, we expect our sales momentum to continue, especially as we enter the sizeable medium-roast coffee segment. With our raised sales outlook, we now expect to be at the higher end of our 2011 full-year diluted earnings per share guidance of $1.43 to $1.50."

Retail net revenue increased 6 percent to $53.4 million for the 13 weeks ended July 3, 2011, from $50.6 million for the corresponding period of fiscal 2010.

Specialty net revenue increased 23 percent to $37.3 million for the 13 weeks ended July 3, 2011, from $30.2 million for the corresponding period of fiscal 2010. Within specialty, grocery net revenue grew 30 percent over last year; foodservice and office grew 19 percent; and home delivery grew 2 percent.

Cost of sales and related occupancy expenses were 49.2 percent of total net revenue, compared to 46.3 percent for the corresponding period last year. The increase resulted primarily from higher coffee costs and to a lesser extent higher milk costs and a mix shift towards the specialty business, which has a higher cost of sales. Price increases across the channels and lower shipping expenses partially offset the impact of these higher costs.

Operating expenses as a percentage of net revenue decreased to 31.1 percent from 33.3 percent for the corresponding period last year due to a favorable mix shift to the specialty business, the impact of price increases across all channels, leveraging of overhead costs, and lower payroll expenses in retail stores.

General and administrative expenses as a percentage of net revenue were 6.7 percent, compared to 7.0 percent for the corresponding period last year. General and administrative expenses increased to $6.0 million from $5.6 million for the corresponding period last year, primarily due to higher payroll-related costs and marketing expenses.

Depreciation and amortization expenses as a percentage of net revenue decreased to 4.3 percent, compared to 5.0 percent for the corresponding period last year. Depreciation and amortization expenses were $3.9 million, compared to $4.0 million in the corresponding period last year.

The company ended the second quarter of 2011 with cash and cash equivalents plus investments of $29 million, compared to $49 million at year end 2010.

The company has updated its full-year 2011 guidance as follows:

  • Raises guidance for 2011 full-year net revenue growth to the 10 percent to 12 percent range, up from 8 percent to 10 percent.
  • Expects 2011 full-year diluted earnings per share to be toward the higher end of the previous guidance range of $1.43 to $1.50. 

 

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