If you ask Keurig Green Mountain, Inc. how they feel about their recent third quarter results, Keurig President and Chief Executive Officer Brian Kelley would say they are “not pleased.” Well, you can’t blame them, especially when the company’s net sales have just gone down by about 5%.
The net sales for Keurig’s third quarter this year only amounted to about $970 million, compared to its net sales during the third quarter last year of about $1 billion. Nonetheless, if you exclude the impact of foreign currency exchange rates, the total net sales decline would be 4%.
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Moreover, the net sales in the domestic market have gone down by 4% during the third quarter. Meanwhile, net sales in Canada have also decreased by 14% during the third quarter on a reported basis.
Sales in Keurig’s Brewers and accessories went down by 26% to $95 million. During the third quarter of last year, sales for the Keurig Brewers and related products were at $128 million.
As for Keurig’s Pods, sales had also gone down slightly by 1% to $815, compared to the 2014 third quarter net sales of $826.3 million. Meanwhile, net sales of other products have also gone down by 12%.
Cutting workforce as part of strategy to cut costs
Following this, Keurig has also announced a “multi-year productivity program,” which aims to reduce costs and streamline the company’s organizational structure. It is Keurig’s hope that it can manage to generate as much as $300 million in savings in the next three years from the said program, which will involve the reduction of the company’s workforce by about 5%.
Nonetheless, Kelley remains optimistic that Keurig’s At Home brewer product line is still poised to reach over 50 million households in the US over time, especially with the recent launch of the Keurig K200 brewer.