WATERBURY, Vt, US – Keurig Green Mountain, Inc. reported its results for the 13 weeks and 52 weeks ended September 27, 2014 on Wednesday after the market close.
The Waterbury, Vermont-based company said it had profit of 86 cents per share. Earnings, adjusted for amortization costs and non-recurring costs, were 90 cents per share.
The results exceeded Thomson Reuters consensus estimates of $0.77 in earnings per share and $1.16 billion in revenue.
For the current quarter ending in December, Keurig Green Mountain expects its per-share earnings to range from 83 cents to 88 cents. Analysts surveyed by Zacks had forecast adjusted earnings per share of $1.
Keurig also said its board authorized a 15 percent increase in its dividend, to $1.15 annually from $1. The new quarterly dividend of 28.75 cents will be paid Feb. 12 to shareholders of record Jan. 13.
Net Sales by Product
Net sales of $1.2 billion represented 14% growth in the quarter over the prior year period driven by strong performance in our portion pack business.
Net sales growth was positively impacted by approximately 4 percentage points in the quarter due to certain retailer customers ordering portion packs more aggressively ahead of our fiscal year end SAP implementation.
The 14% increase includes an unfavorable impact from foreign currency exchange rates of approximately half a percentage point.
Total portion pack net sales increased 22% in the quarter while brewers and accessory net sales declined 5%. Total net sales growth was negatively impacted by a 17% decrease in other product net sales in the quarter.
Fiscal Year 2014
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.
“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.”
“Looking to fiscal year 2015, we remain focused on what we believe is a significant opportunity to grow and premiumize home beverages in both our hot and cold platforms. We’ll continue to invest and execute behind this opportunity, given the powerful brand connection we’ve built with consumers and our successful track record of introducing disruptive and innovative products,” continued Kelley.
“Our strong balance sheet and healthy free cash flow generation are an advantage, enabling us to invest behind organic growth and return meaningful cash to shareholders in the form of both dividends and share repurchases.”
Separately, the company said Frances Rathke, its chief financial officer and treasurer since 2003, will leave Keurig next year after a successor is appointed. The company has hired an executive search firm to recruit a replacement
A well-respected leader of entrepreneurial growth companies, Rathke, 54, joined Keurig in 2003 as Chief Financial Officer and Treasurer and has since been responsible for leading the Company’s finance organization.
This includes overseeing Corporate Financial Planning and Strategy, Mergers and Acquisitions, Investor Relations, Commercial Finance, Accounting and Controls, Treasury, Tax, Audit and Risk Management. In this role, she also serves as management representative for the Audit and Finance Committee for the Board of Directors.
During Rathke’s tenure, net sales at the Company grew 40-fold, from $117 million in 2003 to $4.7 billion in 2014.