GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

Caribou Coffee Company Inc. Reports Operating Results (10-Q)

November 12, 2010 | About:
insider

10qk

18 followers
Caribou Coffee Company Inc. (CBOU) filed Quarterly Report for the period ended 2010-10-03.

Caribou Coffee Company Inc. has a market cap of $232.5 million; its shares were traded at around $11.6 with a P/E ratio of 35.2 and P/S ratio of 0.9. Caribou Coffee Company Inc. had an annual average earning growth of 0.7% over the past 5 years.CBOU is in the portfolios of Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates.

Highlight of Business Operations:

Net sales increased $7.5 million, or 11.8%, to $70.2 million in the third thirteen weeks of 2010 from $62.7 million in the third thirteen weeks of 2009. Each of our business segments contributed significantly to our consolidated revenue growth. Coffeehouse net sales increased $2.1 million, or 3.9%, to $56.6 million in the third thirteen weeks of 2010 from $54.5 million in the third thirteen weeks of 2009 due to higher comparable coffeehouse sales. Commercial and franchise sales increased by $5.3 million, or 64.0%, to $13.5 million for the third thirteen weeks of 2010 from $8.3 million for the third thirteen weeks of 2009 due to additional sales to new and existing customers and franchises.

Coffeehouse sales increased $2.1 million, or 3.9%, to $56.6 million in the third thirteen weeks of 2010 from $54.5 million in the third thirteen weeks of 2009. This increase is attributable to a 4.4% increase in comparable coffeehouse sales in the third thirteen weeks of 2010 as compared to the same period in 2009. The increase in comparable coffeehouse sales was driven by increased traffic in our coffeehouses and a higher average guest check, primarily due to higher food sales, attributable to the launch of hot cereal in our coffeehouses at the beginning of the year and the phased rollout of breakfast sandwiches during the thirteen week period which are now in 200 of our coffeehouses.

Cost of sales and related occupancy costs. Cost of sales and related occupancy costs increased $1.1 million, or 4.6%, to $23.7 million in the third thirteen weeks of 2010, from $22.6 million for the third thirteen weeks of 2009. The increase in total dollars was driven primarily by increased cost of goods related to our 4.4% growth in comparable coffeehouse sales. Cost of sales and related occupancy costs as a percentage of coffeehouse net sales increased to 41.8% in the third thirteen weeks of 2010 from 41.6% in the third thirteen weeks of 2009 due to higher costs associated with a shift to higher quality product platforms launched in our retail coffeehouse segment, particularly shifting from a powder based chocolate ingredient to real, all natural chocolate in all of our chocolate based beverages, offset by sales leverage gained on largely fixed occupancy costs.

Sales increased $4.7 million, or 71.6%, to $11.3 million in the third thirteen weeks of 2010, from $6.6 million in the third thirteen weeks of 2009. We periodically align our inventory weeks of supply on hand across our various coffee blends. In the third quarter, we took advantage of the 13-year highs in the coffee commodity market, and sold $2.0 million of raw coffee beans for blends no longer needed. The remaining increase is primarily attributable to the incremental sales to existing grocery stores, club stores and mass merchandisers, in which Caribou handles sales and distribution, as well as increased sales to Keurig Incorporated, an industry leader in single cup brewing technology. The increase in sales to Caribou-managed accounts was primarily driven by increased distribution gained in the second half of 2009. At the beginning of 2010, Caribou Coffee was found in over forty states and in seven thousand stores through our Caribou-managed sales channel. We did not experience large new customer door growth in the third quarter of 2010. The increase in sales to Keurig has primarily been driven by an increased sales penetration of Keurig single-cup brewing machines.

Cost of sales and related occupancy costs. Cost of sales and related occupancy costs increased $3.5 million, or 82.1%, to $7.7 million for the third thirteen weeks of 2010, from $4.2 million for the third thirteen weeks of 2009. On a dollar basis, this increase in cost of sales was primarily related to the 71.6% increase in sales volume in this segment. As a percentage of sales, cost of sales increased to 68.5% for the third thirteen weeks of 2010, from 64.5% for the third thirteen weeks of 2009. This increase in cost of sales as a percentage of sales was the sale of $2.0 million of raw coffee beans, which had a lower margin than our traditional commercial sales.

Cost of sales and related occupancy costs. Cost of sales and related occupancy costs increased $0.3 million, or 33.7%, to $1.3 million for the third thirteen weeks of 2010, from $1.0 million for the third thirteen weeks of 2009. As a percentage of sales, cost of sales and related occupancy costs decreased to 56.8% for the third thirteen weeks of 2010, from 57.1% for the third thirteen weeks of 2009. The decrease in cost of sales and related occupancy costs as a percentage of sales was primarily due to a change in revenue mix in the franchise segment, as a greater portion of sales were in the form of franchise fees for newly opened franchises.

Read the The complete Report

About the author:

10qk
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 3.0/5 (3 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK