Global Coffee Shipments Increase 2 Percent in the April -- June Quarter After Declining for the Previous Two
After an impressive start to the year coffee stocks have cooled off significantly as Europe's current economic crisis have seen demand drop across the region. But global demand may be picking up as recent data from the International Coffee Organization (ICO) showed that global coffee shipments have increased 2 percent in the April-June quarter, after declining in the two previous quarters. Five Star Equities examines the outlook for companies in the Coffee Industry and provides equity research on Caribou Coffee Company, Inc. (NASDAQ: CBOU) and Dunkin Brands Group Inc. (NASDAQ: DNKN).
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Coffee prices have dropped significantly in 2012. According to the ICO from July 2011 to July 2012 the average monthly price for a pound of coffee has fallen by 24 percent. Coffee companies haven't immediately benefited from lower prices, but will in 2013.
"What they typically do is they buy coffee on a six-to-nine-month-out forward-rolling basis," says Will Slabaugh, research analyst at Stephens Research. "When you see coffee prices dropping now, what you're preparing for is a benefit into next year and then likely into 2014 as well, if prices can stay low."
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Based on the number of coffeehouses, Caribou Coffee is the second largest company-operated premium coffeehouse operator in the United States. The company reported net sales for the second quarter of 2012 increased $0.8 million to $81.1 million, or 1.1 percent, from $80.3 million in the comparable quarter of 2011.
Dunkin' Brands Group is one of the world's leading franchisors of quick service restaurants serving hot and cold coffee and baked goods, as well as hard-serve ice cream. For the full-year 2011, the company had franchisee-reported sales of approximately $8.3 billion. Revenues grew by 9.8 percent compared to the second quarter of 2011.
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