Thursday, May 3, 2012

Green Mountain Coffee Executives "Baffled" By Declining Sales

The big news in the stock market this week was the plunging sales of Green Mountain Coffee, which caused the company's stock to sink dramatically. Here is CNN with the story:
Green Mountain Coffee Roasters shares plummeted Thursday after the company reported quarterly revenue that missed estimates and lowered its guidance for 2012.

Green Mountain (GMCR) shares sank nearly 40% in early morning trading Thursday, dipping to about $30 after closing Wednesday at $49.52.

The company's quarterly earnings came in line with expectations at 64 cents a share, though its $885 million in sales missed estimates of $972 million.

Green Mountain also reduced its fiscal 2012 sales guidance from between $4.3 and $4.5 billion to between $3.8 and $4 billion. The full-year earnings-per-share projection was cut from between $2.55 and $2.65 to between $2.40 and $2.50.
As usual in these situations, the suits don't have a clue:
In a conference call with analysts, Green Mountain executives said they didn't have a full explanation for why sales were weaker than expected. They suggested that low brewer machine sales and weak demand for holiday drinks during the warm winter -- like cider and hot cocoa -- were partially to blame.

"We're very positive about this business going forward, but there's a lot of moving parts," Green Mountain CEO Larry Blanford said.

Green Mountain currently dominates the single-serving coffee market with its popular Keurig, or K-Cup, machines.

It was one of the fastest-growing companies of the past decade and one of the best-performing stocks, handing investors 110% gains on an annualized basis until last fall.
Please allow me as a former Green Mountain customer to offer up a possible explanation. I used to love Green Mountain coffee after having discovered it more than a decade ago when it was still a small regional concern. I even went out of my way to order it online back when it was not available in the stores in my area.

Nowadays, I can even buy it in my local supermarket. But I don't. In fact, I ordered up my last ever batch of the stuff about a year ago. And you know why? Because the coffee now tastes like ass. I don't know what the difference is between how they make the stuff now and how they made it a decade ago. All I know is what my tastes buds tell me.

Somewhere along the way, Green Mountain became far more concerned with expansion than it did about putting out a good product. But that is par for the course in corporate America these days.

Bonus: Instead of some Green Mountain, how about some Green Day...because I came around on Green Mountain


  1. Ah Green Day, takes me back to my junior high and early high school days, and the best summers of my life. I miss my friends from those days... Growing apart is a bitch.

  2. Don't forget all those laid off stiffs that used to have a cup or two of coffee in the morning on the way to their former employment, plus when you have to choose between food/gas/electric/coffee, coffee loses 100 times out of 100.