Keurig Green Mountain reported disappointing quarterly sales Wednesday and said it will eliminate around 330 jobs, or 5 percent of its staff, as it tries to reduce costs.
The maker of single-serve coffee brewing systems said revenue from coffee pods and from its brewers both decreased in the fiscal third quarter. The Waterbury, Vermont-based company said it aims to save $300 million in spending over the next three years by cutting jobs and becoming more efficient.
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Shares of Keurig tumbled $19.99, or 26.7 percent, to $54.99 in aftermarket trading.
Keurig had about 6,600 employees as of Sept. 27, 2014. It expects to take $30 million to $35 million in pretax charges associated with the moves. Most of those will come during its current fiscal quarter.
In addition to the job cuts, the company said its board approved the repurchase of up to $1 billion in stock.
Keurig Green Mountain Inc. said its third-quarter profit slumped 27 percent to $113.6 million, or 73 cents per share. Excluding one-time costs and gains, the company said it earned 80 cents per share. Its revenue fell to $969.6 million, a 5 percent drop. Sales of coffee pods, which bring in most of its revenue, fell 1 percent to $815 million. Sales of brewers and accessories sank 26 percent to $95 million.
Analysts expected net income of 79 cents per share and $1.03 billion in revenue, according to Zacks Investment Research. Keurig's third quarter ended on June 27.
The company lowered its earnings-per-share and revenue projections for the current fiscal year and said its adjusted earnings per share will shrink in the first quarter of fiscal 2016 compared to the same quarter in fiscal 2015.
One reason for that is that Keurig plans to spend least $100 million on Kold, its cold-drink system, in fiscal 2016. The company is also dealing with higher coffee prices and is ramping up production of Kold drink pods as well as shipping the brewing systems. It also expects to ship more hot drink systems in the first quarter.
The Kold system will let people make sodas, sports drinks and other beverages with the touch of a button. The company revealed some details of the device in May, including a greater-than-expected price tag of $299 to $369.
Shares of Keurig Green Mountain Inc. have dropped 43 percent in 2015 and closed at $74.98 on Wednesday.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on GMCR at http://www.zacks.com/ap/GMCR
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