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Caribou Coffee Company, Inc. (CBOU) Message Board

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  • tigerpac tigerpac Nov 2, 2009 9:16 PM Flag

    Peet - They have lost their marbles

    CBOU aint't going to do crap until the ditch their retail locations.

    What PEET has done is a master stroke of genius and i credit their mgmt for getting into the K-Cup market in the third inning rather than waiting until the bottom of the 8th.

    CBOU might have to spin off it's K-Cups business in order to recognize it's full value, otherwise it will just get discounted within the breakeven nature of it's current retail business.

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    • PEET found GMCR's weakness with the license agreement.

      Unfortunately, CBOU does not hold that distinction of being a licensed roaster for GMCR.

    • PEET has retail locations so why the difference? If Tattersfield succeeds in making them profitable CBOU will retain more diversified business model while continuing to expand K-Cup / Commercial business as well. I'm not ready for them to throw in the towel just yet - they generate A LOT of cash. Don't let depreciation expense fool you into believing the retail locations should be ditched. The investment has been made. Unfortunately a non-cash expense makes the bottom line look bad but this is changing due to reduced capital spending.

      • 1 Reply to roman6888
      • CBOU has close to three times the retail locations as PEET.

        PEET has the wholesale grocery & distribution business. CBOU does too, but on a much smaller scale.

        PEET has great mgmt. CBOU is still tring to find it's footing.

        CBOU is closer to what DDRX was BEFORE they sold their retail operations. Why pay all the costs associated with keeping the stores open plus labor when you get sell your brand wholesale and make better profit margins?

        How do you tell your shareholders that all the money you've spent opening stores has not been the success you planned for , except for the management?

        Look at revenue per employee for CBOU (177K) vs. PEET (400K) and you'll see why PEET has a market cap almost 3x that of CBOU.

        Disclosure: I am long Caribou and have been for quite awhile. I'd just wish they would pare down the number of stores they have and stop opening new ones.

 

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