Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR) had a rough day with the equity markets today posting a drop of more than 4.6%, but the stock has been under constant pressure of late by short seller David Einhorn of Greenlight Capital. The coffee giant’s earnings are out now, and it is looking like a total victory for David Einhorn.
The company turned in earnings of that were below expectations on weak sales, not a good combination for a high-flyer. Earnings came in up well over 100% higher at $0.47 EPS on $75.4 million in income and revenue was $711.9 million. Thomson Reuters had estimates of $0.48 EPS and $760.5 million in revenue. The company is giving more detail on its conference call.
Green Mountain noted that about 83% of its net sales in the quarter came from its single cup brewing system and its recurring portion pack sales. The remainder came from sales of bagged coffee and revenue from the office coffee services business. The brewer and accessories sales were up 40% to $115.1 million and the “portion packs” rose 91% to $475.5 million.
The stock has been under immense pressure and it was only getting close to a fair value before the earnings report. After an earnings miss and with a large bet against it with more slowing of growth is really taking a tool.
The after-hours session reaction has Green Mountain Coffee down a whopping 26% at $49.20 on very active trading.
David Einhorn is probably still throwing high-fives in his office for having close to a double right now. He is probably going to celebrate with something more than just a cup of coffee.
JON C. OGG