Peet’s Profit Doubles on Expansion

Peet’s Coffee & Tea Inc. on Wednesday reported an espresso-charged doubling of profit in the second quarter, helped by new store openings, wider availability in grocery stores and strong growth in food-service sales.

The Emeryville, Calif.-based roaster and retailer said net income jumped 114.3% to $1.5 million, or 12 cents a share, from $718,000, or 6 cents, in the second quarter of 2002.

Revenue rose 17% to $29.1 million in the quarter, compared with $24.9 million for the same period a year earlier.

Peet’s, which has carved out a niche in the gourmet coffee business by saying that the java it sells in its stores is never more than seven days from roasting, made its announcement after the stock market closed.

The company’s stock gained 5 cents on Wednesday to close at $18.20 on Nasdaq. Its shares have risen 29% this year.

“We are pleased with the position the company is in as we head into the second half of the year,” Patrick O’Dea, president and chief executive, told investors during a conference call.

The company is rapidly increasing its presence in Southern California, O’Dea said.

Peet’s opened a store in the Belmont Shore section of Long Beach last week and will open another outlet in Ventura this year, bringing the number of Southern California outlets to 14, or about 20% of its 71 retail establishments.

Peet’s also is making inroads on supermarket shelves, tripling its grocery business in the second quarter.

O’Dea said Peet’s has an agreement to put its packaged coffee into 200 Ralphs supermarkets in Southern California in August.

O’Dea said the company was on track to record sales growth of 13% to 15% and earnings of 57 cents to 60 cents a share for the full year.