Caribou Coffee Company (NASDAQ: CBOU)

Caribou Coffee Company Inc. (CBOU) operates the second-largest company-owned gourmet coffeehouse chain in the United States. As of the close of the second quarter of 2009, the Company operated 522 coffeehouses. It offers retail and bulk customers gourmet coffee, espresso, specialty teas, baked goods, and whole bean coffee to club stores, grocers, mass merchandisers, office coffee providers, airlines, hotels, sports and entertainment venues, college campuses and online customers.

Founded in 1992, the Company is headquartered in Minneapolis, Minnesota.

Source: Reuters.com, SEC Filings.

Financial Summary

Source: Reuters.com, SEC Filings.

Analyst Consensus

The mean of 21 analysts polled by Thomson Reuters rate shares of CBOU a “Hold.”

Analyst Recommendations and Revisions

Source: Reuters.com, SEC Filings.

Historical Surprises

Source: Reuters.com, SEC Filings.

Investment Highlights

The Company operates the second-largest company-owned gourmet coffeehouse chain in the United States. As of the close of the second quarter of 2009, the Company operated 522 coffeehouses. It offers retail and bulk customers gourmet coffee, espresso, specialty teas, baked goods, and whole bean coffee to club stores, grocers, mass merchandisers, office coffee providers, airlines, hotels, sports and entertainment venues, college campuses and online customers.

The Company operates in an economic environment of declining consumer discretionary spending, especially gourmet items which was once a popular trend during an extended period of easy money policies of the banking sector. Credit conditions have since reversed markedly, squeezing consumers through high unemployment rates, lower home values and depleted retirement accounts.

As the economy contracted, the Company responded by closing retail outlets and staff, which according to its latest 10-Q for the period ended June 28, included 62 fewer operating coffeehouse weeks, or a decrease of 3.3% of revenue on a same-store basis. The Company said, however, that it intends to expand in existing markets. For the first six months of calendar year 2009 the Company opened 14 new coffeehouses and added distribution points for its whole bean and ground coffee.

Management is aggressively increasing brand awareness and launching promotions to increase same-store revenue during the remainder of the year, thereby affecting increased operating margins to pre-2009 levels of nearly 53% from 50.6% reported for the second quarter of 2008.

The Company’s commercial revenue stream is growing strongly, registering rates of 28% and 42% for the first quarter and first six months of 2009, respectively. By focusing its efforts on sectors experiencing rapid growth, management believes it can mitigate struggling revenue growth and operating margins from the retail outlet segment.

In the Company’s latest 10-Q, net sales declined 0.4%, or $0.2 million, to $63.0 million for the second quarter of 2009. Revenue decline from its retail outlets was offset by its commercial and franchise segments. Revenue derived through the Company’s retail outlets dropped $2.0 million, or 3.4%, to $55.3 million for the second quarter of 2009. Commercial and franchise sales rose $1.7 million, or 29.5%, to $7.7 million for the second quarter of 2009 due to increased sales from existing customers and new customers.

Technical Analysis

Source: http://stockcharts.com/h-sc/ui?s=cbou

CBOU trades above its 13-day moving average. This bullish sign is significant because the moving average are also positively trending as well.

The MACD for CBOU currently indicates a bearish signal, but appears to soon turn bullish The MACD is below the signal line, a 9-day moving average of the MACD. The MACD is, however, above the critical level of 0, which implies the past price action had been positive. Overall, the chart is bullish.

Comparative Analysis

Source: Thomson Financial

Insider Trading Activity

Source: Yahoo Finance

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