Keurig Green Mountain announces Q1 results

Keurig Green Mountain has announced mixed results for its first quarter of 2015, pointing to factors including a voluntary recall on certain brewers, and greater than expected retailer portion pack inventory reductions as the reason for flat revenues over the period. The company’s President and CEO, Brian Kelley, said he expects to see growth over the remainder of the year. “We believe these factors are transitory and, while the impact to the holiday season for our hot platform was disappointing, we remain very enthusiastic about our opportunity to grow and premiumize at-home beverages across both our hot and cold platforms,” Kelley said in a statement. The company’s net sales of US$1.4 billion were in line with the prior year’s quarter primarily because of lower brewer and accessory sales, partially offset by growth in portion packs. Net sales growth in the quarter was negatively impacted by approximately three per cent due to certain retailer customers ordering portion packs more aggressively in the fourth quarter of fiscal year 2014 approximately one per cent from foreign currency exchange rates. Excluding the impact of foreign currency exchange rates and pre-ordering, total net sales grew approximately four per cent and total Keurig beverage system sales grew approximately five per cent. Net sales for the U.S. segment increased two per cent while sales of the Canada segment declined 12 per cent on a reported basis and six per cent excluding the impact of foreign currency exchange rates. Total portion pack net sales increased nine per cent in the quarter while brewers and accessories net sales declined 18 per cent. Total net sales growth was negatively impacted by a 17 per cent decrease in other product net sales in the quarter. The 18 per cent decline in Keurig’s brewer and accessory net sales compared to the prior year period was due to a 12 per cent decline in brewer sales volume, driven largely by weaker sales of MINI Plus brewers. Brewer net price realization declined by eight per cent and foreign currency exchange rates negatively impacted net sales by roughly one per cent. This was partially offset by three per cent of positive brewer mix. Keurig's Board of Directors declared a regular quarterly cash dividend of US$0.2875 per share of the company's common stock.