WATERBURY, Vt.--(BUSINESS WIRE)-- Keurig Green Mountain, Inc. (Keurig), a personal beverage system company that has revolutionized the way consumers create and enjoy beverages, today announced its business results for the 13 weeks and 52 weeks ended September 26, 2015. Net sales of $1.04 billion for the quarter and $4.5 billion for the full year.
"Our results for the quarter and the year reflect the competitive and dynamic marketplace in which we operate as well as the steps we are taking to position our Company for longer-term growth and value creation," said Brian Kelley, Keurig's President and CEO. "I'm particularly pleased with the benefits realized from our cost reduction efforts as well as our strong cash generation, both of which exceeded expectations in the fourth quarter. While we expect marketplace conditions will remain challenging in the near term, we have a stronger product line-up and price positioning as we enter the new holiday season."
Mr. Kelley continued, "Our priorities for 2016 are to reinvigorate our hot system and continue the disciplined rollout of our Kold system. We remain confident that our investments in the business and our multi-year productivity program will deliver long-term value to shareholders. Today's announcement of the Board's authorization of a 13% increase in our dividend underscores our confidence in our future prospects and continues our track record of delivering strong cash returns to our shareholders."
Fourth Quarter Fiscal 2015 Financial Review
Net Sales by Product
Net sales of $1.0 billion decreased 13% versus the prior year period with declines in brewer sales and pod sales. The net sales decline includes an unfavorable impact from foreign currency exchange rates of approximately 2%.
Pods
- Pod net sales were driven by a 4% decrease in equivalent servings2 volume and an approximately 6% decrease due to product mix. This was partially offset by an approximately 2% increase due to net price realization.3 Foreign currency exchange rates negatively impacted pod net sales by approximately 2%.
- For the Company's U.S. At Home business, pod volumes fell by 3%. The Company typically sees a build in customer and retailer inventory in the fourth quarter in advance of the holiday season. In the fourth quarter of 2014, the Company saw a much larger build in such inventories, due in part to the SAP transition in the first quarter of 2015. While shipments were impacted by this comparison, consumer demand for pods as measured by retail sales remains healthy. The Company estimates that retail unit sales of pods grew 7% in the fourth quarter of 2015.
Brewers and Accessories
- For the quarter, 1.9 million Keurig® hot system brewers were sold including 1.8 million sold by Keurig with 0.1 million reported sold by Keurig's licensed brewer partners. This brewer shipment number does not account for consumer returns.
- Brewer sales were driven by a 20% decrease in sales volume, an approximately 10% decrease due to product mix and an approximately 1% decrease due to net price realization. Foreign currency exchange rates negatively impacted brewer and accessory net sales by approximately 1%.
Other Products
- Sales of other products were driven by the unfavorable impact of foreign exchange rates, the loss of a customer in our away from home channel and our decision to focus and allocate resources on our pod business.
Fiscal Year 2015 Financial Review
Net Sales by Product
For the year, net sales of $4.5 billion declined 4% over the prior year. The 4% net sales decline includes an unfavorable impact from foreign currency exchange rates of approximately 1%.
Pods
- For the year, approximately 10.5 billion equivalent pod servings were sold.
- Pod sales were driven by an increase of approximately 7% due to equivalent servings volume and a 2% increase due to net price realization partially offset by a roughly 7% decrease due to product mix. Foreign currency exchange rates negatively impacted pod net sales by approximately 1%.
Brewers and Accessories
- For the year, 9.2 million Keurig® hot system brewers were sold including 8.7 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.
- Brewer net sales were driven by a decrease of 16% due to sales volume, a 5% decline in net pricing and a roughly 1% decrease due to product mix. Foreign currency exchange rates negatively impacted brewer net sales by approximately 1%.
- Additionally, accessories net sales decreased by $15 million.
Other Products
Sales of other products were primarily driven by the unfavorable impact of foreign exchange rates as well as the loss of a customer in our away from home channel and our decision to focus and allocate resources on our pod business. Full report.
