Green Mountain Coffee Roasters, Inc. (GMCR) is flourishing as consumers are opting for home-brewed coffee amid inflated prices at the pump and the supermarket. The company recently topped analysts estimates by 19% and has a projected growth rate of 20%.

Company Description

Green Mountain Coffee Roasters, Inc is a prominent fixture in the specialty coffee industry. The company sells a wide variety of coffee blends commercially and direct to customers in addition to teas, hot cocoa, and Keurig brewing products. Green Mountain is a socially responsible company headquartered in Waterbury, Vermont and has a market cap of approximately $900 million.

Net Income Up 67% in Third Quarter

Green Mountain announced its fiscal 2008 third-quarter results on July 31st. The company earned 25 cents per share in the quarter, up from just 15 cents in the same period last year. This was the third surprise in the last four quarters as analysts only estimated 21 cents per share for the company.

Net Sales were $118.1 million, a 43% year-over year increase. The increase in sales was driven by a sharp increase in Keurig brewers sold, up 61% year-over-year and a 49% increase in single serving packs sold.

One Cup at a Time

August 1st the company announced that it will be opening a new manufacturing facility in Knox County, Tennessee. The 334,000 square foot facility will primarily produce K-Cups packs, the companies single serving package for the Keurig brewing systems. The centralized location should reduce distribution costs and help the company meet the growing demand for single-serving products.

Award Winning Design

The Keurig B3000 brewer won a Silver Excellence in Design from DESIGN magazine on July 21st. The single serving brewer that has replaced coffee pots in large offices has a unique look, is easy to use, and brews a cup of coffee in less than one minute. The Office Coffee Services channel accounts for 30% of the company’s shipments by the pound.

At the Top of the Industry

Green Mountain has a projected growth rate of 20.0% over the next five years, easily above the industry average of 13.5%. The company also boasts a Net Profit Margin of 4.1%, about three times higher than the industry average. The Zacks #1 rated stock is also first in its industry.

Green Mountain is Cleaning Up

Green Mountain gave employees paid time off to clean up the Winooski River in Vermont. Volunteers spent the last week of July pulling debris, tires, and garbage from the river. This is the fourth year Green Mountain has participated through American Rivers, the non-profit that organized the event. The company has been recognized by several business publications, including Forbes, for its corporate citizenship.

The Chart

The stock is currently trading in the middle of a newly developed channel, bound by support at $32 and resistance at $40.

Content Courtesy: Zacks Investment Research

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