Keurig Green Mountain, the maker of single-serve coffee machines, tumbled in late trading after cutting its annual forecast, hurt by slow sales of its second-generation brewing system.
The company now expects earnings per share to decline by a mid-single-digit percentage after factoring in a 14-cent impact from currency fluctuations. That compares with a previous prediction for a percentage gain in the mid-single digits. Keurig also warned that sales may be flat this year, versus an early forecast for a rise in the mid-to high-single digits.
Sales volume for the company’s brewers declined 22 per cent last quarter, underscoring the slow adoption of the new Keurig 2.0, which lets people brew a carafe of coffee at a time. Brewer inventory also is stacking up at retailers, Keurig said. Separately, the company named a new chief financial officer, Peter Leemputte, who will replace Fran Rathke in August.
“We are taking actions to reduce brewer inventories, enhance our 2.0 brewer packaging to better communicate our extensive brand variety and step up innovation,” chief executive officer Brian Kelley said in a statement.
Shares of Waterbury, Vermont-based Keurig plunged as much as 19 per cent in late trading. Even before the tumble, the stock was down 18 per cent this year, dragging down by concerns about the Keurig 2.0 and speculation that a new cold brewing system would be delayed.
Bloomberg News, edited by ESM
