Shares of Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR) rallied on Tuesday after the company announced that it will appoint a new Chief Executive Officer.
Brian Kelley, who worked as a chief product supply officer for Coca-Cola Refreshments, the North American business unit of Coca-Cola Company (NYSE: KO) will be replacing Green Mountain’s Chief executive Larry Blanford on December 3.
Speaking to reporters, Michael Hardy, the interim chairman of Green Mountain’s board, said that Blanford conveyed his desire to depart from the company back in February and since then he was working with the board for searching a successor.
Blanford, 58 years old, took over the reins in 2007; and was credited for broadening K-cups beyond coffee concept to include almost everything from cold lemonades to hot cocoa.
Nevertheless, the company’s reputation took a beating in 2010 when the Securities and Exchange Commission (SEC) initiated a still ongoing investigation on company’s dubious accounting and revenue recognition practices.
Again in October 2011, hedge-fund manager David Einhorn, whose Greenlight Capital Inc. had a short position in Green Mountain stock, disapproved company’s lack of transparency with regard to its financial reporting. Stocks plummeted at that moment.
Adding to woes was company’s failure to meet its quarterly sales targets in preceding two quarters as the pace of growth started to slow down.
However, Hardy ruled out that Blanford’s departure has anything to do with his performance or SEC investigations.
“Frankly, this had nothing to do with anything relating to the SEC investigation or Larry’s performance. We just happened to find the right guy at the right time. During Larry’s tenure we had 24 or 25 earnings releases and never missed earnings numbers but missed sales in the last two quarters. Larry’s record has been unbelievably good at dealing with the Street.”
For Kelley, the job is cut out as he would look to stem Starbucks Corp’s (NASDAQ: SBUX) growing dominance. Starbuck’s, the world’s largest coffee chain, recently introduced its own single-serve machine, which prepares lattes and brewed coffee one cup at a time.
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