Coffee and tea company JDE Peet's has raised its full-year sales growth forecast, after beating half-year expectations.
The maker of coffee brands Jacobs, L'Or, Tassimo and Douwe Egberts said it expects full-year sales growth at the higher end of its previous forecast of 3% to 5%.
Jefferies analysts highlighted the better-than-expected revenues and profit in a note, stressing the stock's weakness until today, down 24% year to date up to the previous session's close.
Organic sales grew 3.6% for the first half of the year, beating the 2% expected by analysts in a consensus provided by the Amsterdam-based company.
Regional Performance
JDE Peet's saw organic growth of 1% in Europe, its biggest region, while prices fell by 0.4%.
Notable was 11.8% growth in its LARMEA market made up of Latin America, Russia, the Middle East and Africa.
That reflected the integration of Brazil's Marata brands, acquired last year, and price increases to offset rising green coffee prices, it said.
Still, organic adjusted earnings before interest and taxes (EBIT) in the region fell 10.1% due to 'transactional forex impact and the carry-over effect of the brand transition in Russia in 2023', it said.
"Obviously a bit of a hit, but things are normalised by now," interim CEO Luc Vandevelde said on an investors call, confirming the completion of the transition from global to local coffee brands in Russia announced last year.
Performance Highlights
Group adjusted EBIT rose to €692 million ($749 million) from €581 million a year earlier and beating the €601 million expected by analysts.
Vandevelde pointed to rising green coffee prices, spiking ocean freight rates and growing demand for more affordable offerings, saying that"additional price increases and continuous cost discipline" should be expected in the coming quarters.
Coffee prices steadied near recent peaks earlier this month, underpinned by supply tensions in top producers Brazil and Vietnam.
