Shares of Green Mountain Coffee (GMCR) are getting a good grinding Thursday after the coffee maker lowered its full-year outlook, and then left analysts bemused as to why sales missed estimates for the second time in three quarters.
The maker of Keurig coffee brewers saw its share price sink over 40 percent to $26 Thursday morning, wiping out close to half of the company’s market value.
The company’s stock has lost about 75 percent of its value since hedge-fund manager David Einhorn began bashing the company last fall, criticizing its financial disclosures and spending plans. Einhorn’s Greenlight Capital reportedly has a short position in Green Mountain, meaning it is betting the company’s stock price will fall.
Green Mountain cut its forecast for the year after the close on Wednesday and warned of slowing growth after demand for K-Cup coffee refills fell far short of expectations in the second quarter.
“As a result of the disappointing results, management's credibility is yet again under question,” KeyBanc Capital Markets analyst Akshay Jagdale said in a note.
A Green Mountain spokeswoman declined to comment.
“We have diminished faith in Green Mountain's forecasting abilities following misses in two of the last four quarters,” William Chappell at SunTrust Robinson Humphrey said in a note. The analyst cut his rating on the stock to “neutral” from “buy.”
Green Mountain further worried analysts on a conference call following the release of its earnings report, appearing to not understand why exactly second quarter sales had missed expectations.
Larry Blanford, president and CEO, told analysts that “unseasonably warm” winter weather and other factors, such as customer ordering patterns, may have had an impact on sales, but also said the company is “trying to really understand” the reasons behind the decline.
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