STATEN ISLAND, N.Y. (AP) — Private-label coffee maker Coffee Holding Co. reported a loss for its most recent quarter as lower coffee prices hurt its performance.
Its shares plunged nearly 15 percent by midday Wednesday on the news.
Coffee Holding's customers tend to buy more private-label products when the prices for name-brand products are up. That has helped Coffee Holding in recent years when coffee prices were soaring. But a recent decline in commodity prices has led many of the top brand names to cut prices.
Andrew Gordon, the company's president and CEO, said that he believes many customers held off on making their purchases during the quarter while they awaited price cuts from the big national brands.
Those cuts came in May as Kraft Foods Inc., maker of Maxwell House, and J.M. Smucker Co., which makes Folgers, both announced cuts.
As a result, Coffee Holding said it sold 12 percent fewer cases of private-label coffee during the quarter than it did in the same period in 2011.
The company partially offset this decrease with increased sales of unroasted coffee beans, by volume, to gourmet roaster customers. It also saw sales of its branded products, which include Cafe Caribe and S&W, more than double during the period.
But the company estimates its total sales would have been almost $2 million greater if the prices in the coffee market had not fallen.
"Throughout 2012, most specifically the last four months, we have faced more challenges as a company than I can recall in my 30-plus years in the industry," Coffee Holding CEO Andrew Gordon said in a statement.
The company reported a loss of $370, 247 or 6 cents per share, for the quarter that ended April 30. That's compared with net income of $1.2 million, or 22 cents per share, in the same period last year.
Its total revenue fell to $37.1 million from $37.3 million.
"Although quarterly results are not what we had hoped for, we believe they do not adequately reflect the true condition of the company," Gordon said. "We believe commodity prices will eventually recover reflecting the true supply/demand fundamentals of the coffee market rather than the current speculative and outside forces which have adversely affected the market during 2012."
Shares of the company, which is based in Staten Island, N.Y., fell $1.06 to $6.22 by midday. Its shares are trading near the low-end of its 52-week range of $6.50 to $30.98.