Positive reaction to earnings
On November 18, 2015, Keurig Green Mountain (GMCR) reported its fiscal 4Q15 and full year 2015 earnings ended September 26, 2015. The stock rose 19.4% to $48.37 in after-hours trading on November 18, shortly after earnings were released due to reported earnings per share ahead of estimates and a dividend hike. However, they closed at $40.50 at the end of trading hours on the same day. The stock was up again by 23.3% to $49.94 in afternoon trading on November 19 and closed at $47.88.
Keurig share prices had reacted negatively to the fiscal 3Q15 earnings release and fell hard by 30%, closing at $52.67 on the day of the release. The shares have been following a declining trend since then, trading in the range of $50–$60. Before the fall, Keurig shares had been trading in the higher range of $70–$80.
Keurig shares have fallen a huge 70% since the start of fiscal 2015 and before its fiscal 4Q15 earnings report. However, a good fiscal 4Q15 report overall, a strong guidance for fiscal 2016, and a dividend hike boosted Keurig shares.
About the company
Keurig Green Mountain (GMCR), based in Waterbury, Vermont, produces and sells specialty coffee, coffeemakers, teas, and other beverages in the United States and Canada. Its various brands include K-Cup, Vue, Rivo, K-Carafe, and Bolt. It’s part of the processed food and packaged goods industry.
Its peers in the industry include JM Smucker (SJM), General Mills (GIS), and ConAgra Foods (CAG), which closed at $121.28, $56.91, and $41.10, respectively. The Guggenheim S&P 500 Equal Weight Consumer Staples ETF (RHS) invests 2.1% of its portfolio in GMCR stock. It also invests 2.6% in SJM, 2.6% in GIS, and 2.5% in CAG as of November 19, 2015. The ETF closed at $111.04, and its year-to-date return is 6.3%.