Green Mountain Coffee Roasters Inc. (GMCR) Gets No Respect: Bed Bath & Beyond Inc. (BBBY), Starbucks Corporation (SBUX)

Page 1 of 2

Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) is the Rodney Dangerfield of coffee stocks.

Just as Dangerfield crafted an ironically lucrative career telling people that he doesn’t get any respect, the company behind the Keurig single-cup brewing system is still getting dissed even though the shares have more than tripled since bottoming out this past summer.

The latest slam came over the weekend as Barron’s Andrew Bary suggested that Warren Buffett may want to consider snapping up Bed Bath & Beyond Inc. (NASDAQ:BBBY). In dismissing the recent same-store sales weakness at the home-goods retailer — up just 1.7% in its fiscal quarter ending in November and pegged to grow between 2% and 4% in the quarter that just ended last month — Bary argues that the K-Cup company may be to blame.

Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR)One reason for weaker sales could be flagging interest in Keurig coffee makers made by Green Mountain Coffee Roasters. Bed Bath is a major seller of them.

Are you getting that? There’s flagging interest in Keurig brewers, and that’s why Bed Bath & Beyond is doing so poorly.

Well, let’s fact-check that salvo.

Back to School
Bed Bath & Beyond Inc. (NASDAQ:BBBY) net sales in its November quarter were crummy. Net sales did climb 15%, but 79% of that growth was tied to the June acquisitions of Linen Holdings and Cost Plus. Back out those purchases and organic growth at the namesake chain rose a mere 3% as a result of meager expansion and the 1.7% increase in comps.

By that math, Green Mountain must be doing lousy if “flagging interest” is dragging down Bed Bath & Beyond’s performance.

It’s not, but don’t take my word for it.

Bed Bath & Beyond Inc. (NASDAQ:BBBY) and Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) don’t have the same fiscal calendar, but we do know that net sales rose 16% during the holiday quarter ending in December and that Green Mountain’s target net sales growth of 15% to 20% for the entire fiscal year that ends in September. Nothing there seems to match the 3% organic growth at Bed Bath & Beyond during the November quarter of what will likely be net sales growth of less than 5% during the quarter that just ended.

One can argue that Bary did specify brewers — not the popular K-Cup refills — but that doesn’t hold up, either. Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) sold a record 4.95 million Keurig brewers during the holiday quarter, 18% more than it did a year earlier.

Easy Money
Green Mountain investors should be used to this by now. Despite its stellar growth and even its recent buoyant appreciation, the company that owns the single-serve brewing market is often talked down in its own niche.

Remember when the introduction of Starbucks Corporation (NASDAQ:SBUX)‘s Verismo was supposed to cool Keurig’s popularity? Well, the Verismo rollout last year didn’t dissuade Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) from sticking to its 15% to 20% net sales growth trajectory. Brewer sales were up 14% and K-Cup sales were up 21% in Green Mountain’s latest quarter.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 44 percentage points in 21 months Learn how!

Lists

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!