Keurig Green Mountain Inc cut its full-year sales and profit forecasts as the company struggles to convince consumers to take up its new Keurig 2.0 brewing system, sending its shares sharply lower in extended trading.
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Sales of Keurig's brewers have slowed in the past two quarters due to high prices of the 2.0 brewing system, poor initial reviews and confusion over whether the new machine could still brew certain brands.
Shares of the company, which also reported lower-than-expected second-quarter profit and sales, fell as much as 19 percent in extended trading.
Chief Executive Brian Kelley told Reuters on Wednesday that consumers were using unlicensed pods in its first-generation machine. Such pods were not compatible with the 2.0 system.
"Some consumers were then confused," he said. "We've converted a lot of those unlicensed players into our system."
The maker of K-Cup single-serve coffee pods also named Peter Leemputte as its chief financial officer and treasurer, succeeding Fran Rathke.
Leemputte, who will take charge on Aug. 17, joins from Mead Johnson Nutrition Co where he served as CFO.
Rathke, who has been with Keurig for the past 12 years, will stay on as a senior adviser until September, Keurig said.
Keurig said it expects full-year net sales to grow in the flat-to-low single-digit percentage range. It had earlier forecast mid-to-high single-digit percentage growth.
Analysts on average were expecting 2015 sales of $4.98 billion, according to Thomson Reuters I/B/E/S. This represents a growth of 6 percent over 2014.
Keurig also expects 2015 adjusted profit to fall in the mid-single digit percentage range, compared with the mid-single digit percentage growth it forecast earlier.
The company also forecast a current-quarter adjusted profit of 75-80 cents per share, well below the average analyst estimate of $1.08 per share.
Net income attributable to Keurig fell 4 percent to $155.5 million, or 97 cents per share, in the second quarter ended March 28.
On an adjusted basis, the company earned $1.03 per share, lower than the $1.05 analysts had expected.
Revenue rose 2.1 percent to $1.13 billion, but missed the average analyst estimate of $1.15 billion.
Up to Wednesday's of $10.08, the company's shares had risen 13 percent in the past 12 months.
(By Anjali Athavaley; Reporting by Ramkumar Iyer in Bengaluru; Editing by Sriraj Kalluvila)
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