This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Coffee Stocks May Lose Some Steam This Week

Stocks in this article: SBUX DNKN GMCR PEET

Key to the report will be what management says about fiscal 2012 guidance. Last quarter, management tightened the range for earnings, but didn't raise it. Another focus for investors will be the ramping up of new consumer product goods (CPG) initiatives, including the recent launch of Starbucks Refreshers energy drinks. An update on the planned launch of the single-serve Verismo machines along with any financial impact from these new initiatives will be closely watched.

10 Stocks That Could Rise in Market Decline >>

Dunkin' Brands is expecting robust earnings growth this quarter, with the Bloomberg consensus estimate for the first quarter at $0.23, a 64% increase over last year. The biggest growth driver has been store growth -- expected to be about 3% to 5% in the U.S. (not including the Baskin Robbins brand) and 5.5% to 7% internationally annually. While the company did tweak international growth plans down moderately last quarter, better visibility on the long-term plan internationally is expected to emerge this year.

On the topic of coffee bean costs, Dunkin' won't benefit from the reduction, as Starbucks and others will, because their model is nearly 100% franchised. The cost benefit will go to the franchisee and help improve their individual cash flow, potentially opening up the opportunity for them to increase investment in existing and new locations. Dunkin' has benefited from the success of its K-cup launch in August and has seen its weaker Baskin Robbins business begin to stabilize. Those trends are expected to continue in this earnings report.

The stock has traded sideways into earnings, but John Ivankoe, an equities analyst at JPMorgan, recommends buying the shares more aggressively only at lower prices.

Enron 10 Years After -- From Bad to Worse >>

Dunkin' and Starbucks will set the stage for earnings from other coffee companies including Peet's Coffee (PEET), Green Mountain (GMCR) and Caribou Coffee (CBOU), all of which will report earnings next week. The quarter is expected to be impacted by coffee bean prices that were locked in last year at higher rates, making this a tough quarter to swallow for specialty coffee companies. Guidance will be the focus and any commentary on commodity cost relief for next year.

-- Written by Lindsey Bell in New York.

>To follow the writer on Twitter, go to Lindsey Bell.

2 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • 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 Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs