Emeryville, Feb 13 - Peet's Coffee & Tea, Inc. today announced results for its fourth quarter and fiscal year 2008.
Highlights
- Reports net revenue of $79.1 million for the fourth quarter, an increase of 12% versus last year,
- Reports fourth quarter diluted earnings per share of $0.29, an increase of 26% versus last year,
- Reports fiscal year diluted earnings per share of $0.80, an increase of 36% versus last year, and
- Reaffirms guidance for 2009 of diluted earnings per share of $0.94 to $1.00.
For the fourth quarter of 2008, consisting of the 13 weeks ended December 28, 2008, net revenue increased 12% to $79.1 million from $70.9 million for the corresponding period of fiscal 2007. For the 52 weeks ended December 28, 2008, net revenue increased 14% to $284.8 million from $249.4 million in fiscal 2007.
Net income for the quarter was $4.0 million or $0.29 per diluted share, compared to $3.3 million or $0.23 per diluted share for the corresponding period last year. For the fiscal year 2008, net income was $11.2 million or $0.80 per diluted share, compared to $8.4 million or $0.59 per diluted share last year. Fiscal 2007 results include approximately $0.9 million or $0.06 per diluted share related to stock option review professional fees.
"We are pleased with our results for the quarter and full year," said Patrick O'Dea, president and chief executive officer of Peet's Coffee & Tea. "Real productivity improvements resulting from past investments we've made are improving our margins as we move forward. It's a real tribute to the team we have in place at Peet's that we were able to achieve our earnings forecast for 2008 and be in a position to continue to significantly improve our earnings performance in 2009, despite the challenging environment."
2008 Fourth Quarter Financial Summary
Retail net revenue increased 8% to $50.9 million for the quarter from $47.0 million for the corresponding quarter last year. The increase was primarily attributed to new retail stores opened in the last 12 months. The Company opened seven new retail locations during the quarter.
Specialty net revenue increased 18% to $28.3 million for the quarter from $24.0 million for the corresponding quarter last year. Within the specialty business, grocery grew 23%, foodservice and office sales were up 33%, and the home delivery business declined 7% compared to the corresponding period last year.
Cost of sales and related occupancy costs decreased to 46.8% of total net revenue for the quarter compared to 47.5% for the corresponding period last year. The decrease from last year was due to procurement savings, increased prices in retail and grocery, and leverage of costs related to the roasting facility that opened last year, partially offset by higher green coffee costs.
Operating expenses as a percent of net revenue increased to 32.7% of total net revenue for the quarter compared to 32.5% for the corresponding period last year. The increase was due to higher costs associated with expanding the grocery business, higher incentive compensation and store impairment expense, partially offset by favorable workers' compensation insurance expense.
General and administrative expenses decreased to $6.3 million for the quarter from $6.5 million for the corresponding period last year primarily due to lower marketing spending in the retail segment, partially offset by professional fees and compensation costs to support our growth.
Depreciation and amortization expenses increased to $3.5 million for the quarter from $3.0 million for the corresponding quarter last year. The increase was primarily due to the opening of 23 new retail stores during the year.
The Company ended the quarter with cash and cash equivalents plus short- term marketable securities of $13.3 million.
Fiscal 2009 Outlook
Looking ahead, Peet's provided the following guidance for fiscal 2009, which includes 53 weeks:
-- Total net revenue is expected to grow 10 to 13%,
-- Diluted earnings per share is expected to be in the $0.94 to $1.00 range, and
-- The Company is planning to open about 10 new retail locations and 30 to 40 new licensed locations.
"Clearly, 2009 will be a challenging year for all businesses," said O'Dea. "I believe, however, we are better positioned than most to continue delivering strong earnings growth. We expect our margins to continue to improve as we leverage the past investments we've made in our people, the plant and infrastructure. In addition, we have a strong balance sheet with $13 million of cash and no debt. Most importantly, our commitment to truly distinctive quality coffees and teas has garnered us a highly loyal customer following, which is a real asset in times like these."