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    1. Coffee Service

    Peet's Coffee & Tea, Inc. Reports 5 Percent Revenue Gain In Second Quarter

    Aug. 3, 2012

    Peet's Coffee & Tea, Inc. announced its second quarter results for the fiscal period ended July 1, 2012, which included 13 weeks.

    For the 13 weeks ended July 1, 2012, net revenue increased 5 percent to $95.4 million from $90.6 million for the corresponding period of fiscal 2011. Diluted earnings per share was $0.30, compared to $0.38 for the corresponding period of fiscal 2011.

    Retail net revenue increased 4 percent to $55.4 million for the 13 weeks ended July 1, 2012, from $53.4 million for the corresponding period last year. The increase was driven by a higher average transaction and an $874,000 sales tax refund related to resolution of a sales tax computation interpretation with the taxing authorities. The company did not open any stores in the quarter and ended the quarter with 197 stores.

    Specialty net revenue increased 7 percent to $40.0 million for the 13 weeks ended July 1, 2012, compared to $37.3 million for the corresponding period last year. Within specialty, grocery sales were up 5 percent compared to the corresponding period last year, foodservice and office sales grew 15 percent, and home delivery sales grew 3 percent. Grocery revenue growth was impacted by an increase in competitive pricing pressure during the period.

    Cost of sales and related occupancy expenses increased as a percent of total net revenue to 50.4 percent for the quarter, compared to 49.2 percent for the corresponding period last year. The increase was caused by higher green coffee costs, which were 16 percent higher 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 31.2 percent of net revenue, compared to 31.1 percent for the corresponding period last year. A favorable mix shift towards the specialty business and lower legal fees were substantially offset by higher healthcare costs, payment card processing fees, and investments in overhead expenses.

    General and administrative expenses increased as a percent of net revenue to 7.8 percent, compared to 6.6 percent for the corresponding period last year. General and administrative expenses increased to $7.4 million from $6.0 million for the corresponding period last year, primarily due to higher payroll and marketing costs.

    Depreciation and amortization expenses decreased as a percent of net revenue to 4.1 percent, compared to 4.3 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 $38.9 million at the end of the quarter, compared to $35.4 million at the end of fiscal 2011.

    For more information about Peet's Coffee & Tea, Inc., visit www.peets.com.