The formative inspiration for Caribou Coffee Company was a herd of caribou thundering across the Alaskan wilderness. And then life happened. It was bought last year for about $340 million by a private German holding company, Joh. A. Benckiser Group, on a roll to dominate the coffee market. Here’s an update on coffee companies and acquisitions as the world buys more tea and coffee than ever before.
Joh. A. Benckiser Group
Over the past five years, world retail coffee sales have grown year on year by almost 8% according to Netherlands coffee giant, D.E. Master Blenders 1753 (DEMBF, Financial), soon to be acquired by Joh. A. Benckiser Group as its third coffee company acquisition in the last year. In 2012 Benckiser Group bought Caribou Coffee Company Inc. for around $340 million and Peet’s Coffee & Tea Inc. for approximately $1 billion, reported by Bloomberg. Already a 15% stakeholder, Joh. A. Benckiser is expected to pay $9.8 billion for D. E. Master Blenders, a Sara Lee Corporation spinfoff offering coffee and tea. DEMBF has annual sales of $4 billion across more than 45 countries, competing with coffee major Nestlé, the largest coffee maker.
In this summer’s press releases, Joh. A. Benckiser Group confirms that both companies are making good progress on the preparations for the offer with an announcement expected by Aug. 15, 2013. In April 2013, the Board of D.E Master Blenders1753 fully supported and unanimously recommended the offer. Joh. A. Benckiser Group’s Chairman Bart Becht said he considers this latest acquisition “the ideal platform for organic growth and acquisitions in the fast-moving consumer goods coffee and tea sector” where tea sales are also up 8.5%. Based in Ludwigshafen, Germany, Joh. A. Benckiser GmbH is a private holding company and the investment vehicle for the Reimann family.
D. E. Master Blenders 1753 (DEMBF) – Up 36% over 12 months
D.E. Master Blenders1753 has a market cap of $9.82 billion and trades with a P/E of 32.40.
Current shares are priced at $16.50.
Starbucks Corporation (SBUX, Financial) - Up 60% over 12 Months
Starbucks Corporation (SBUX) has a market cap of $54.69 billion and trades with a P/E of 37.00.
Current shares are priced at $72.78.
Serving a billion, Starbucks Corporation shipped its one billionth Starbucks cup this quarter. The coffee company opened 341 net new stores in fiscal third quarter and now operates 19,209 stores globally. The company reported financial results for its 13-week fiscal third quarter and 39-week fiscal year to date ended June 30, 2013 with total net revenues increased by 13% to $3.7 billion. Globally, comparable store sales grew 8% driven by 7% growth in traffic; all regions accelerated over the second quarter. Starbucks’ China/Asia Pacific comparable growth was 9%. The company reported a consolidated operating income increase of 25% to $615.2 million, with a consolidated operating margin expanded 150 basis points to 16.4%. Earnings per share increased 28% to $0.55 per share. The dollars loaded on Starbucks Cards globally grew 30% year over year.
“Starbucks Q3 results represent the best across-the-board third-quarter performance in our 42-year history,” said Howard Schultz, chairman, president and CEO. "Our more than 19,000 store global footprint, our fast-growing CPG presence and our best-in-class digital, card, loyalty and mobile capabilities are creating a 'flywheel' effect elevating the relevancy of all things Starbucks, and driving profitability.”
Check out second quarter Guru trading action for SBUX.
Green Mountain Coffee Roasters Inc. (GMCR, Financial) – Up 220% over 12 months
Green Mountain Coffee Roasters Inc. has a market cap of $11.68 billion and trades with a P/E of 29.50.
Current shares are priced at $78.28.
Green Mountain Coffee Roasters Inc, (GMCR), a specialty coffee maker and innovator in coffee brewing technology, announced its third quarter fiscal year 2013 results for the 13 weeks and 39 weeks ended June 29, 2013. The company reported revenue increases 11% over the prior year period with U.S. revenue up 14%. GAAP EPS of $0.76 and non-GAAP EPS of $0.82 represent growth of 65% and 58%, respectively, over the prior year period. The company gross margin increased 720 basis points to 42.1% from 34.9% in the prior year period. Free cash flow of $126 million was reported for the quarter, with $582 million for the first nine months of fiscal year 2013.
“We continue to drive leverage in our business and were very pleased to deliver earnings per share growth in the quarter that exceeded our revenue growth by more than five-fold," said Brian P. Kelley, GMCR's president and CEO, in a company press release. The company’s Keurig brewers drove 21% unit growth of our Keurig Brewed portion pack business during the third fiscal quarter.
No coffee report would be complete without the donuts:
Krispy Kreme Doughnuts Inc. (KKD, Financial) – Up 236% over 12 Months
Celebrating its 76th birthday this year, Krispy Kreme Doughnuts Inc. began in 1937, and now has 773 stores (including franchisee stores) in 22 countries. Best known for its wide variety of doughnuts, the company also competes for coffee dollars.
Krispy Kreme Doughnuts Inc. has a market cap of $1.39 billion and trades with a P/E of 66.80.
Current shares are priced at $21.24.
For first quarter fiscal 2014, ended May 5, 2013, Krispy Kreme revenues increased 11.2% to $120.6 million from $108.5 million. Adjusted net income was $14.1 million ($0.20 per share) compared to $10.3 million ($0.14 per share) in the first quarter last year. Second quarter financials and the outlook for the full year will be released on Aug. 29, 2013.
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Joh. A. Benckiser Group
Over the past five years, world retail coffee sales have grown year on year by almost 8% according to Netherlands coffee giant, D.E. Master Blenders 1753 (DEMBF, Financial), soon to be acquired by Joh. A. Benckiser Group as its third coffee company acquisition in the last year. In 2012 Benckiser Group bought Caribou Coffee Company Inc. for around $340 million and Peet’s Coffee & Tea Inc. for approximately $1 billion, reported by Bloomberg. Already a 15% stakeholder, Joh. A. Benckiser is expected to pay $9.8 billion for D. E. Master Blenders, a Sara Lee Corporation spinfoff offering coffee and tea. DEMBF has annual sales of $4 billion across more than 45 countries, competing with coffee major Nestlé, the largest coffee maker.
In this summer’s press releases, Joh. A. Benckiser Group confirms that both companies are making good progress on the preparations for the offer with an announcement expected by Aug. 15, 2013. In April 2013, the Board of D.E Master Blenders1753 fully supported and unanimously recommended the offer. Joh. A. Benckiser Group’s Chairman Bart Becht said he considers this latest acquisition “the ideal platform for organic growth and acquisitions in the fast-moving consumer goods coffee and tea sector” where tea sales are also up 8.5%. Based in Ludwigshafen, Germany, Joh. A. Benckiser GmbH is a private holding company and the investment vehicle for the Reimann family.
D. E. Master Blenders 1753 (DEMBF) – Up 36% over 12 months
D.E. Master Blenders1753 has a market cap of $9.82 billion and trades with a P/E of 32.40.
Current shares are priced at $16.50.
Starbucks Corporation (SBUX, Financial) - Up 60% over 12 Months
Starbucks Corporation (SBUX) has a market cap of $54.69 billion and trades with a P/E of 37.00.
Current shares are priced at $72.78.
Serving a billion, Starbucks Corporation shipped its one billionth Starbucks cup this quarter. The coffee company opened 341 net new stores in fiscal third quarter and now operates 19,209 stores globally. The company reported financial results for its 13-week fiscal third quarter and 39-week fiscal year to date ended June 30, 2013 with total net revenues increased by 13% to $3.7 billion. Globally, comparable store sales grew 8% driven by 7% growth in traffic; all regions accelerated over the second quarter. Starbucks’ China/Asia Pacific comparable growth was 9%. The company reported a consolidated operating income increase of 25% to $615.2 million, with a consolidated operating margin expanded 150 basis points to 16.4%. Earnings per share increased 28% to $0.55 per share. The dollars loaded on Starbucks Cards globally grew 30% year over year.
“Starbucks Q3 results represent the best across-the-board third-quarter performance in our 42-year history,” said Howard Schultz, chairman, president and CEO. "Our more than 19,000 store global footprint, our fast-growing CPG presence and our best-in-class digital, card, loyalty and mobile capabilities are creating a 'flywheel' effect elevating the relevancy of all things Starbucks, and driving profitability.”
Check out second quarter Guru trading action for SBUX.
Green Mountain Coffee Roasters Inc. (GMCR, Financial) – Up 220% over 12 months
Green Mountain Coffee Roasters Inc. has a market cap of $11.68 billion and trades with a P/E of 29.50.
Current shares are priced at $78.28.
Green Mountain Coffee Roasters Inc, (GMCR), a specialty coffee maker and innovator in coffee brewing technology, announced its third quarter fiscal year 2013 results for the 13 weeks and 39 weeks ended June 29, 2013. The company reported revenue increases 11% over the prior year period with U.S. revenue up 14%. GAAP EPS of $0.76 and non-GAAP EPS of $0.82 represent growth of 65% and 58%, respectively, over the prior year period. The company gross margin increased 720 basis points to 42.1% from 34.9% in the prior year period. Free cash flow of $126 million was reported for the quarter, with $582 million for the first nine months of fiscal year 2013.
“We continue to drive leverage in our business and were very pleased to deliver earnings per share growth in the quarter that exceeded our revenue growth by more than five-fold," said Brian P. Kelley, GMCR's president and CEO, in a company press release. The company’s Keurig brewers drove 21% unit growth of our Keurig Brewed portion pack business during the third fiscal quarter.
No coffee report would be complete without the donuts:
Krispy Kreme Doughnuts Inc. (KKD, Financial) – Up 236% over 12 Months
Celebrating its 76th birthday this year, Krispy Kreme Doughnuts Inc. began in 1937, and now has 773 stores (including franchisee stores) in 22 countries. Best known for its wide variety of doughnuts, the company also competes for coffee dollars.
Krispy Kreme Doughnuts Inc. has a market cap of $1.39 billion and trades with a P/E of 66.80.
Current shares are priced at $21.24.
For first quarter fiscal 2014, ended May 5, 2013, Krispy Kreme revenues increased 11.2% to $120.6 million from $108.5 million. Adjusted net income was $14.1 million ($0.20 per share) compared to $10.3 million ($0.14 per share) in the first quarter last year. Second quarter financials and the outlook for the full year will be released on Aug. 29, 2013.
Here’s the Guru trading on KKD.
If you are not a Premium Member, we invite you for a 7-day Free Trial.
GuruFocus Real Time Picks reports the stock purchases and sales that Gurus have made within the prior 2 weeks. The report time lag can be as short as 2 days after the date of the transaction. This feature is for Premium Members only.
Check out the Guru Focus special feature 52-week low screener to find the stocks hitting new lows but are still held by top investor Gurus and Insiders.
