JDE Peet’s reported a rise of 2% in its full-year core profit, exceeding analysts’ expectations. The company is also predicting a “stable” gross profit for 2022 in spite of inflation.
JDE Peet’s is one of the largest coffee companies in the world, and also owns a range of coffee and tea brands including L’OR, Pickwick, Senseo, Tassimo and TiOra. It sells its coffee mostly at supermarkets but also has a small business in coffee shops led by Peet’s, a popular brand in the US.
The company would “successfully navigate an unprecedented year of inflation in 2022.”
Fabian Simon, JDE Peet’s CEO
Earnings before interest, taxes, depreciation and amortisation (EBITDA) totalled €1.30 billion (approximately USD 1.42 billion) for the full year. This was an improvement over analysts expectations which expected the figure to remain unchanged from 2020, at €1.28 billion.
Fabian Simon, JDE Peet’s chief executive officer, stated that he was confident the company would “successfully navigate an unprecedented year of inflation in 2022.”
The coffee company is also forecasting double-digit sales growth in the current year, but expects “stable” gross profit. It remains the aim for medium-term sales growth of 3-5% and single-digit operating profit growth.
Martin Deboo, an analyst for Jefferies, a broker, stated that while both earnings and sales were better than expected in 2021, the company’s forecast of stable gross profit in 2022 “implies presumably material uncertainty around marketing and wage costs”. The analyst predicts a decline in operating profit in 2022, and listed the shares as likely to underperform.
