Zacks_Analysts' Blog : Caribou Coffee Company Beats - Analyst Blog

Caribou Coffee Company Inc. (CBOU), the second largest company-owned premium coffeehouse operator in the United States, posted second quarter 2010 earnings of 12 cents per share, beating the Zacks Consensus Estimate by 3 cents. The second quarter earnings doubled from 6 cents reported in the prior-year quarter. Caribou Coffee Company’s net sales for the quarter climbed 9.4% to $68.9 million.

 

The better-than-expected results were driven by strong growth across all the three lines of business. Coffeehouse sales rose 4.4% year over year to $57.8 million, as comparable-store sales jumped 4.8%. Commercial sales leaped 51.0% to $8.7 million, driven by sales growth in consumer packaged good business, while revenues from Franchise spiked up 28.6% to $2.5 million.

 

Cost of sales and related occupancy cost increased 11.8% to $30.6 million, driven by sales increase in the quarter; where as general and administrative expense increased 12.4% to $7.6 million. Moreover, operating expense surged 5.0% to $25.1 million as Caribou Coffee continues to invest in product and marketing initiatives to drive traffic.

 

Total operating income soared 85.5% to $2.6 million and operating margins were up 160 basis points (bps) to 3.8% as operating cost based on revenues dropped 150 bps attributed to operating efficiencies. Additionally, depreciation and amortization expenses also declined 130 bps to 4.4% as capital spending was lower than the year-ago quarter.

 

Caribou Coffee Company ended the quarter with cash and cash equivalents of $16.2 million, and shareholders equity of $54.8 million.

 

One of Caribou Coffee Company’s primary competitors, BJ’s Restaurants Inc. (BJRI) reported its second quarter earnings of 50 cents per share on July 22, which surpassed the Zacks Consensus Estimate of 20 cents. The better-than-expected results were driven by comparable-store sales growth and higher traffic.

 

Based in Minneapolis, Minnesota, Caribou Coffee Company operates 411 company-owned coffeehouses and 128 franchised and licensed locations.