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GMCR Reaches New 52-Week High
Shares of the coffee chain
Green Mountain Coffee Roasters Inc. reached 52-week high of $59.62 on Friday, May 3, following the company’s expansion in the food service industry and anticipation of robust fiscal 2013-second-quarter earnings.
The closing price of the specialty coffee retailer was $59.62 on May 3, representing a solid 1-year return of about 139.0% and year-to-date return of about 33.6%. Average volume of shares traded over the last three months stands at approximately 3608.2K. Growth Drivers
On May 2, 2013, the company’s Keurig K150 Series Commercial Brewing System was certified by the National Sanitation Foundation (NSF) for foodservice use. The certification ensures that the brewing system meets public health and safety standards intended for commercial foodservice. Products bearing the certification are respected and trusted by the consumers, retailers and regulatory authorities.
The Keurig K150 Series Commercial Brewing System can be used in foodservice outlets. With installation of a Keurig K150 Series Commercial Brewing System, the restaurants do not have to maintain separate pots or urns of coffee for regular, decaffeinated and flavored varieties. Moreover, it will save the restaurants the hassle of wastage and cleaning of the unconsumed coffee. Thus, the convenience of the brewing system is expected to make it quite popular in the foodservice industry and, thus, boost sales for the company.
The coffee maker delivered robust first-quarter adjusted earnings (excluding amortization of identifiable intangibles and SEC-inquiry related expenses) of 76 cents per share that surpassed the year-ago quarter earnings of 60 cents by 27%. It also beat the Zacks Consensus Estimate of 65 cents by 17% on the back of solid top line growth and lower interest expense.
Green Mountain is expected to deliver a robust fiscal 2013 second-quarter results, scheduled to report on May 8, considering its upbeat first-quarter 2013 results, initiatives to rule out competition, new product roll outs and a better visibility for fiscal 2013.
For the second quarter of fiscal 2013, the company expects adjusted earnings per share in the range of 70 cents–75 cents and sales growth in the range of 14% to 18%. The guidance reflects the company’s continuous efforts to increase brand investments and product innovations.
The company is optimistic about fiscal 2013. It raised adjusted earnings outlook to the range of $2.72 to $2.82 per share from the prior guidance of $2.64 to $2.74 per share. The company expects net sales growth in the range of 15% to 20% over fiscal 2013.
Green Mountain currently carries a Zacks Rank #1 (Strong Buy). Other favorable stocks in the retail and wholesale sector that are worth considering include Flower Foods Inc. ( FLO - Snapshot Report) and Sears Holding Corporation , both holding a Zacks Rank #1 (Strong Buy), and Safeway Inc. holding a Zacks Rank #2 (Buy).