WATERBURY, Vt.--(BUSINESS WIRE)-- Keurig Green Mountain, Inc. (Keurig) (NASDAQ: GMCR), a leader in specialty coffee, coffee makers, teas and other beverages with its innovative brewing technology, today announced its business results for the 13 weeks and 52 weeks ended September 27, 2014.
"2014 was an exciting year that saw Keurig Green Mountain successfully execute against aggressive strategic goals and meet or exceed all of our financial targets," said Brian Kelley, Keurig's President and CEO. "The fourth quarter was a strong end to the year, with 17% Keurig beverage system revenue growth highlighted by strong portion pack growth across our brand portfolio."
- Revenue grew 14% for the quarter and 8% for the full year
- Non-GAAP operating income grew 26% for the quarter and 22% for the full year. GAAP operating income increased 29% for the quarter and 24% for the year
- Non-GAAP operating margins expanded 190 basis points in the quarter and 240 basis points for the full year. GAAP operating margins expanded 220 basis points in the quarter and 250 basis points for the full year
- Non-GAAP EPS of $0.90 for the quarter and $3.93 for the full year grew 1% and 16% respectively. Excluding dilution from the Coca-Cola and Lavazza investments and the impact of foreign exchange, non-GAAP EPS grew 12% in the quarter and 21% for the full year. GAAP EPS of $0.86 for the quarter and $3.74 for the full year increased 4% and 18% respectively, reflecting the dilution from these recent equity transactions and the impact of foreign exchange
- Outlook includes fiscal year 2015 revenue growth in the high-single to low-double digit range with non-GAAP EPS growth of mid-single to high-single digits including the dilutive impact of the aforementioned equity transactions and foreign exchange
Fiscal Year 2014 Financial Review
Net Sales by Product
For the year, net sales of $4.7 billion grew 8% over the prior year driven by a combination of strong performance in the portion pack business and solid brewer volume growth. The 8% increase includes an unfavorable impact from foreign currency exchange rates of approximately one percentage point. The core Keurig® beverage system business grew 11% over the prior year period excluding approximately one percentage point impact of foreign exchange rates.
The primary driver of the 8% increase in net sales for fiscal year 2014 as compared to the prior year was a $417 million, or 13%, increase in total portion pack net sales. Brewer and accessories net sales declined 1%, over fiscal year 2013. Total net sales growth was also negatively impacted by an 18% decrease in other product net sales in the quarter.
Portion Packs
- For the year, approximately 9.8 billion Keurig Brewed® portion packs were sold.
- The 13% increase in portion pack-related net sales over the prior year period was driven by an increase of approximately 18 percentage points due to sales volume partially offset by an approximately 3 percentage point decrease due to net price realization and a roughly 2 percentage point decrease due to product mix and the impact of foreign currency exchange.
Brewers and Accessories
- For the year, 10.9 million Keurig® system brewers were sold including 10.4 million sold by Keurig with 0.5 million reported sold by Keurig's licensed brewer partners. This brewer shipment number does not account for consumer returns.
- The 1% decrease in Keurig's brewer and accessory net sales compared to the prior year period was driven by a 6 percentage point increase in brewer sales volume and a 3 percentage point increase due to brewer product mix. This was offset by a 10 percentage point decrease due to brewer net price realization and a roughly 1 percentage point decrease due to the impact of foreign currency exchange.
- Additionally, accessories net sales increased by $4.5 million, or 8 percentage points, over the prior year.
Other Products
- Sales of other products declined $62.3 million, or 18%, from the prior year period primarily due to the continuing demand shift from traditional coffee package formats to portion packs.
- For the year, gross profit increased 12% and gross margin improved 140 basis points to 38.6% from 37.2% in the prior year period. Full report.
