Peet's Coffee & Tea, Inc. announced its first quarter results for the fiscal period ended April 1, 2012, which included 13 weeks.
In this release, the company:
Reports diluted earnings per share of $0.25;
Reports net revenue growth of 7 percent;
Confirms fiscal 2012 diluted earnings per share guidance of $1.70 to $1.80
For the 13 weeks ended April 1, 2012, net revenue increased 7 percent to $94.8 million from $88.5 million for the corresponding period of fiscal 2011. Diluted earnings per share was $0.25, compared to $0.41 for the corresponding period of fiscal 2011.
"We knew the first half of 2012 would be challenging for us," said Patrick O'Dea, president and CEO of Peet's Coffee & Tea, Inc. in a prepared statement. "In the first quarter we faced the highest coffee cost inflation of the year, and while our results reflect it, they were in line with our expectations. As we previously indicated, we expect to gain significant momentum in the second half as coffee cost inflation abates, and we remain excited about the strategic growth initiatives we're investing in this year."
Retail net revenue increased 4 percent to $54.1 million for the 13 weeks ended April 1, 2012, from $52.1 million for the corresponding period last year. The increase was driven by a 5 percent rise in sales of beverages and pastries and, to a lesser extent, an increase in whole-bean and related sales. The company opened one store in the quarter, ending the quarter with 197 stores.
Specialty net revenue increased 12 percent to $40.7 million for the 13 weeks ended April 1, 2012, compared to $36.4 million for the corresponding period last year. Within specialty, grocery sales were up 12 percent compared to the corresponding period last year, foodservice and office sales grew 16 percent, and home delivery sales were flat.
Cost of sales and related occupancy expenses increased as a percent of total net revenue to 51.0 percent for the quarter, compared to 46.6 percent for the corresponding period last year. The increase was caused by higher green coffee cost, which was 44 percent more expensive per pound than the same quarter last year. This increase was partially offset by price increases across all channels and lower shipping expenses.
Operating expenses were 31.5 percent of net revenue, consistent with the corresponding period last year. A favorable mix shift towards the specialty business and the impact of price increases across all channels were offset by higher payment card processing fees and investments in overhead.
General and administrative expenses increased as a percent of net revenue to 7.8 percent, compared to 7.7 percent for the corresponding period last year. General and administrative expenses increased to $7.4 million from $6.8 million for the corresponding period last year, primarily due to higher payroll-related and marketing expenses.
Depreciation and amortization expenses decreased as a percent of net revenue to 4.2 percent, compared to 4.4 percent for the corresponding period last year. Depreciation and amortization expenses were $3.9 million for the quarter, consistent with the corresponding period last year.
Cash and cash equivalents plus short-term and long-term marketable securities were $52.0 million at the end of the quarter, compared to $35.4 million at the end of fiscal 2011.
Looking ahead, Peet's confirmed the following fiscal 2012 guidance:
Total net revenue growth of around 10 percent.
Diluted earnings per share in the range of $1.70 to $1.80.
