Keurig Q3 Brewer Sales Down 18%

UPDATE:

During its quarterly conference call Wednesday evening, Keurig announced that John Whoriskey, president of U.S. Sales & Marketing, is retiring. A replacement was not immediately named.

“We want to thank John for his 13 years of service, as he has been a key part of Keurig's growth,” Keurig Green Mountain CEO Brian Kelley said.

ORIGINAL STORY:

Third quarter net sales for Keurig Green Mountain were down as the company reported double-digit declines in pods, brewers and accessories.

For the period ending June 27, company-wide sales were $969.6 million, down 5% from the comparable quarter the previous year. Year-to-date sales of $3.48 billion are off 1% from the same time frame in the previous fiscal year.

In the quarter, pod sales were $815 million, down 1% year-over-year. Brewer and accessory sales were $95 million, off 26% from the previous year.

For the quarter, 1.36 million Keurig system brewers were sold, a figure that does not account for consumer returns, the company said.

Keurig officials noted the 26% decline in brewer and accessory net sales compared to the prior year period was primarily due to a 18% decline in brewer sales volume, driven by high levels of inventory at retail and the timing of restocking the Mini Plus brewer.

Brian Kelley, Keurig Green Mountain president and CEO, said the company was not pleased with its revenue growth, adding that the company is taking “decisive actions” to adapt and compete more effectively in today’s “rapidly evolving, dynamic marketplace.”

“We are implementing a multi-year productivity program that we are confident will enhance our operational effectiveness and enable us to fund incremental investment in innovation and brand building,” he said.

Kelley reported that Keurig’s K200 brewer is off to a “strong start” and that the addition of the new brewer along with other enhancements to its entire at home brewer assortment will allow for continued U.S. growth.

“We continue to believe that our hot system has the potential to reach more than 50 million U.S. households over time, more than double its size today,” he said. “In addition, the upcoming launch of our Keurig Kold system creates an even larger opportunity for long-term growth and value creation.”

Kelley also announced that the company’s board of directors has approved a $1 billion share repurchase plan.