Green Mountain stock plunges 48%
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Green Mountain Coffee Roasters Inc. lost almost half its stock-market value Thursday after disappointing second-quarter results heightened concerns about the company’s growth prospects.
Shares of the onetime market darling slumped 48%, sinking to $25.87. Green Mountain, which makes single-serve Keurig coffee machines and K-Cup coffee packs, traded at nearly $112 last September.
After the close of trading Wednesday, Green Mountain reported sales that were far short of expectations: $885.1 million, compared with the consensus estimate of $971.7 million. Its profit margins declined sharply, and it reduced its annual earnings estimate to $2.40 a share from $2.50.
“After several quarters of robust adoption, we now expect a more moderated growth trajectory going forward for both Keurig’s brewer and K-Cup pack sales,” the company said in its earnings release.
The performance intensified criticism from investors who have raised questions about the company’s growth potential and accounting practices. A prominent hedge-fund manger gave a 110-page slide show last year raising doubts about Green Mountain.
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