Caribou Coffee Reports Fourth Quarter Sales Increase Of 18.8 Percent

Highlights For The Fourth Quarter Of 2011 Include:

  • Consolidated sales increased 18.8 percent
  • Comparable coffeehouse store sales increased 5.6 percent
  • Commercial and franchise sales increased 68.6 percent
  • Net income attributable to Caribou Coffee Co., Inc. was $4.9 million, or $0.24 per diluted share
  • Non-GAAP pro forma net income attributable to Caribou Coffee Co., Inc. was $2.8 million, or $0.14 per diluted share, compared to pro forma net income of $2.6 million, or $0.13 per diluted share for the same period in 2010

 

Speaking on behalf of the company, Michael Tattersfield, president and CEO commented in a prepared statement, “Our fourth quarter marked the conclusion of a fantastic year for Caribou Coffee, in which we made progress strategically, financially and culturally. We are pleased to have delivered another solid quarter, one that rounds out a record year of financial performance for Caribou. Looking ahead, we are optimistic about what we can achieve across each of our business lines, but are particularly excited to be resuming meaningful development of company-owned coffeehouses. As always, we will continue to provide the meaningful experiences our guest’s love, while enhancing returns for our shareholders."

Fourth Quarter 2011 Results

Net sales for the quarter of $92.5 million increased $14.6 million, or 18.8 percent, from $77.9 million in the comparable quarter of 2010.

Coffeehouse sales were $66.0 million in the fourth quarter of 2011, an increase of 6.1 percent compared to $62.1 million in the fourth quarter of 2010. The company’s food platform, specifically the addition of breakfast and lunch sandwiches, continued to drive comparable coffeehouse sales, which were a 5.6 percent increase in the quarter.

Commercial sales were $23.3 million in the fourth quarter of 2011, an increase of 77.5 percent compared to $13.1 million in the fourth quarter of 2010, largely driven by sales related to the Keurig single-serve platform, as well as new and existing customers in the company’s grocery channel and increased penetration in foodservice channels.

Franchise sales were $3.3 million in the fourth quarter of 2011, an increase of 24.6 percent compared to $2.7 million in the fourth quarter of 2010. Growth in product sales and royalties from 169 franchise locations, a net increase of 38 locations from the prior year, drove the increase in franchise sales versus last year.

Cost of sales and related occupancy costs in the fourth quarter of 2011 was $49.6 million, an increase of $13.1 million, or 36.0 percent, compared to the fourth quarter of 2010 and were driven by the company’s consolidated sales growth. As a percentage of revenue, cost of sales and related occupancy costs were 53.6 percent in the fourth quarter of 2011 versus 46.8 percent in the fourth quarter of 2010. The higher coffee commodity costs drove the increase as a percentage of revenue compared to the prior year as well as a shift in the overall mix change to the company’s commercial and franchise channels, which have higher cost of sales as a percentage of sales.

Operating expenses in the fourth quarter of 2011 were $27.5 million, an increase of $1.5 million, or 5.7 percent, compared to 26.0 million in the fourth quarter of 2010. The increase in operating expenses was driven by expenses tied to sales volume increases and new company-owned coffeehouse openings. As a percentage of revenue, operating costs were 29.7 percent, compared to 33.4 percent in the fourth quarter of 2010. The decrease as a percentage of revenue is the result of leverage gained on fixed costs within the company’s business channels as well as a shift in the overall sales mix to the company’s commercial channel, which has a lower operating expense component than its retail coffeehouses.

General and administrative expenses decreased $0.3 million, or 3.3 percent, to $7.5 million in the fourth quarter of 2011, from $7.8 million in the fourth quarter of 2010. As a percentage of total net sales, general and administrative expenses decreased to 8.1 percent in the fourth quarter of 2011, compared to 10.0 percent in the fourth quarter of 2010 as the company leveraged fixed costs against higher sales.

The company’s net income attributable to Caribou Coffee Co., Inc. for the fourth quarter of 2011 was $4.9 million or $0.24 per diluted share, compared to $4.3 million, or $0.21 per diluted share, in the same period in 2010. The company ended the quarter with $44.5 million in cash and cash equivalents and no long term debt.

The company’s non-GAAP pro forma net income attributable to Caribou Coffee Co., Inc. in the fourth quarter of 2011 was $2.9 million, or $0.14 per diluted share, compared to a pro forma net income of $2.6 million, or $0.13 per diluted share for the same period in 2010.

Fiscal Year 2012 Outlook

Looking ahead, Caribou Coffee confirmed the following fiscal year 2012 guidance:

  • Net sales growth of approximately 10 percent.
    • Comparable coffeehouse sales growth of 2 percent to 4 percent.
    • Commercial sales growth of approximately 20 percent.
    • New coffeehouse unit growth of 55 to 70, of which approximately 20 will be company-owned coffeehouse openings.
  • Capital expenditure investments of $13 million to $15 million.
  • Diluted earnings per share of $0.48 to $0.51. 

 

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