Consumers’ willingness to pay higher prices for JDE Peet’s coffee aided the company’s first-half earnings to surpass analyst projections, boosting the company’s stock price.
According to a statement released on Wednesday, the owner of Douwe Egberts and Pickwick increased prices by less than one eurocent per cup on average, but it was enough to increase revenue by nearly 20 percent to 3.97 billion euros ($3.9 billion), exceeding market expectations.
As of 10:55 a.m. in Amsterdam, the shares were 11 percent higher at 30.80 euros than they were in February.
When “confronted with an exceptional level of cost inflation,” it is necessary to raise prices, according to Chief Executive Officer Fabien Simon. In addition to increased cost efficiencies, the company’s “absolute gross profit held up well year over year,” he said.
The stock of JDE Peet rises after the company’s first-half results exceed expectations.
Rising wages and coffee prices are compelling roasters and retailers to raise prices at the register. Due to inflation, higher wages, and anti-Covid measures in China, Starbucks’ operating margin decreased by 400 basis points in the quarter ending on July 3.
As a result of the efforts of numerous European consumer companies to combat inflation, consumers have borne the brunt of inflation thus far.