Grocery Helps Peet's Coffee & Tea Brew Strong Q2 Sales

EMERYVILLE, Calif.-- Peet's Coffee & Tea, Inc. here owes much of its robust sales growth to the supermarket sector, which is proving to be a lucrative venue for its branded premium coffee and tea sales, said the company yesterday.

The beverage roaster and marketer said sales grew 24.4 percent for the quarter, to $41.7 million from $33.6 million for the corresponding period of fiscal 2004. It was slightly higher than previous guidance of 21 to 22 percent. For the half year, sales are up 23.5 percent.

Earnings grew 46.6 percent in the quarter, to $2.6 million from $1.8 million for the corresponding period last year.

Specialty revenue in the quarter increased 30.2 percent to $13.1 million, compared to $10.1 million last year. Within specialty sales, the grocery business continues to grow the most rapidly, up 47.1 percent over last year, with existing grocery customers accounting for over half of the increase, Peets officials said. The food service business also grew significantly at 33.9 percent, benefiting from new customers added in the last 12 months. Home delivery sales grew 10.9 percent, and the office business grew 30.6 percent.

Retail revenue increased 21.9 percent to $28.6 million for the quarter, from $23.4 million for the corresponding period. The company attributed that rise primarily to new retail stores opened in the last 12 months, and secondarily to growth in existing stores.

"We are pleased with the progress we are making in executing our growth strategy, as indicated by our results this quarter and our first half sales growth," said Patrick O'Dea, President and CEO of Peet's Coffee & Tea. "While we expect our growth rate in the third and fourth quarters to come down a bit due to the timing of new store openings this year versus last, we remain on target to deliver our original guidance for the year."
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