Keurigs Earnings Hit By Brewer Recall Q1 Sales Are Flat

WATERBURY, VT -- Keurig Green Mountain posted first quarter earnings of 88¢ a share, compared with 91¢ per share last year. Its recall of 7.2 million Keurig Mini Plus brewers took a bite out of the company's results.

Revenue was $1.39 billion, flat with the same quarter last year.

"Revenue came in below our expectations primarily due to a weaker than expected holiday season for brewers, including the effect of the voluntary recall on certain Mini Plus brewers, and greater than expected retailer portion pack inventory reductions," said Keurig Green Mountain president and chief executive Brian Kelley. "We believe these factors are transitory and, while the impact to the holiday season for our hot platform was disappointing, we remain very enthusiastic about our opportunity to grow and 'premiumize' at-home beverages across both our hot and cold platforms."

Keurig reported a 9% increase in portion pack net sales year over year and sold 4.5 million Keurig brewers in the first quarter. That figure excludes consumer returns.

The brewer and accessory segment saw an 18% decline in net sales due to a 12% decline in brewer sales volume, driven largely by weaker sales of Mini Plus brewers.

Sales of other products fell 17% year over year, attributable to the ongoing shift to portion packs from the traditional coffee package format.

Keurig repurchased 586,000 of its shares for $81 million during the first fiscal quarter. The company expects adjusted earnings to be between $1 and $1.05 per share, and projects full year revenue to grow in the mid- to high-single digits.

The single-cup brewer maker said its Keurig cold system is on track to launch this fall.