Additionally, Culver's intent was to say that the current high rate of coffee prices is not sustainable over the long term, and that prices will come down over time, though not likely in the near future.
Starbucks offered weaker-than-expected 2011 profit guidance as the cost of sales in its recent quarter jumped 10.9% year-over-year to a 51.5% share of total revenue, compared with a 49.8% share of total revenue, in the year-earlier period.
Rising costs for many commodities have been hitting food, beverage and consumer product makers increasingly for months -- and coffee companies have certainly not been immune.Green Mountain Coffee Roasters (GMCR) said recently that its margins have been growing despite soaring coffee bean costs. Peet's Coffee & Tea (PEET) lowered its profit guidance by 10 cents per share as coffee prices skyrocketed. J.M. Smucker (SJM) said that green coffee costs were "significantly higher in the second quarter of 2011," leading it to raise prices earlier in the year. Smucker raised prices of its Folgers and other well-known brands by around 9%, its largest price hike in years. Canada-based coffee shop chain Tim Hortons (THI) did not specifically mention how rising coffee and commodity costs affected its results last quarter, but reported that its cost of sales jumped 15.9% last quarter to a 62.5% share of total revenue, up from 59.6% share in the year-earlier period. In line with a general market selloff Friday, Starbucks shares fell 0.8% to close at $36.15 on Friday. Green Mountain lost 1.2% to $75.56, Peet's was lower by 1.6% at $48.02 and Smucker shed 0.6% to $75.44. Tim Hortons bucked the trend, gaining 0.6% to close at $47.85. -- Written by Miriam Marcus Reimer in New York.
>To contact the writer of this article, click here: Miriam Reimer. >To follow the writer on Twitter, go to http://twitter.com/miriamsmarket. >To submit a news tip, send an email to: email@example.com.
>>See our new stock quote page. Get more stock ideas and investing advice on our sister site, Stockpickr.com.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV