Earnings Preview: Peet's - Analyst Blog
13 Février 2012 - 12:45PM
Zacks
Peet's Coffee & Tea
Inc. (PEET), one of the world’s leading specialty coffee
roaster and marketer of fresh roasted whole bean coffee, is
scheduled to report its fourth-quarter and fiscal year 2011
financial results on February 15, 2012.
The current Zacks Consensus
Estimate for the fourth quarter is pegged at 43 cents a share,
while it is $1.50 per share for the fiscal year 2011. The Zacks
Consensus Estimate projects revenues for the quarter to be $103
million, while $373 million for the fiscal year 2011.
Third Quarter 2011
Recaps
Peet’s, which faces stiff
competition from Green Mountain Coffee Roasters
Inc. (GMCR) and Starbucks Corporation
(SBUX), posted robust results for the third quarter of 2011 as
earnings of 28 cents per share surpassed the Zacks Consensus
Estimate by a penny, while they were in line with the prior-year
period earnings.
The company also affirmed its 2011
earnings to be at the higher end of the previous guidance range of
$1.43 to $1.50. In addition, Peet’s expected its 2011 reported
earnings to be at the higher end of the $1.27 to $1.34 range,
including litigation-related expenses of 16 cents per share.
Further, Peet’s anticipates that
its 2012 earnings would be in the range of $1.70 to $1.80. The
current Zacks Consensus Estimate for fiscal 2012 is $1.79.
Earnings were primarily impacted by
strong performance of the grocery business, reporting a 38%
year-over-year growth, as well as good sales improvement in all
segments.
Net sales climbed 14.0% to $91.2
million in the quarter from $80.2 million in prior-year quarter,
demonstrating strong fundamentals and business growth.The company
thus affirmed its total net revenue growth guidance to be in the
range of 10% to 12% for fiscal 2011. It also expects net revenue to
grow around 10% for 2012.
Agreement with
Analysts
The analysts expect Peet’s to
either follow the trend of beating its earnings estimates or remain
in line with the estimates, as it has been doing for the last four
quarters. Though the analysts have not revised their estimates in
the last one month for the current quarter and fiscal year 2011,
there is a slight upside trend in the fiscal year 2012, which
justifies a neutral sentiment on the stock.
Out of the 8 analysts providing
estimates for both the current and the next year, none changed
their estimates on the stock over the past one month. The trend
indicates no clear directional movement for the upcoming quarters
and signifies that the analysts are circumspect about the long-term
trend earnings of the company.
Magnitude of Estimate
Revisions
Over the past 30 days, the estimate
for Peet’s remained unchanged at 43 cents for the current quarter
and at $1.50 per share for the fiscal year 2011. The estimates,
however, decreased for the next quarter by a penny to 38 cents and
increased for the fiscal year 2012 by a penny to $1.79 per
share.
Earnings
Surprise
With respect to earnings surprises,
Peet’s has topped the Zacks Consensus Estimate in three of the last
four quarters, while Peet’s estimates remained in line with the
Zacks Consensus Estimate in one quarter. Over the last four
quarters, the earnings surprise ranged from a positive 0.00% to a
positive of 20.59%, with the average earnings surprise being
14.35%, suggesting that Peet’s has outperformed the Zacks Consensus
Estimate.
Recommendation
Peet’s Coffee & Tea is a
growing company. The company’s high quality standard and its
variety are maintained by its vertically integrated business model.
Further, management expects momentum and plenty of new growth
opportunities for the company. It expects to deliver strong sales
and earnings growth, while continuing to invest in and explore
additional growth initiatives.
However, the highly competitive
nature of specialty coffee category and the vulnerability of coffee
prices to weather and damage by pests concern us.
Currently, Peet’s holds the Zacks
#3 Rank, which translates into a short-term Hold rating. Over the
long term, we prefer to rate the stock as Neutral.
GREEN MTN COFFE (GMCR): Free Stock Analysis Report
PEETS COFFE&TEA (PEET): Free Stock Analysis Report
STARBUCKS CORP (SBUX): Free Stock Analysis Report
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