Keurig Green Mountain Inc said on Wednesday that it expects to reduce its workforce by about 5 percent as the company grapples with declining sales of its brewers and single-serve coffee pods.
Shares of the K-Cup packaged coffee maker plunged 32 percent to $51.25 in pre-market trading. The shares last hit those levels in April 2013. Volume was 1.3 million shares, nearly what the stock has recently traded in a full day.
The headcount reductions are part of a plan to cut $300 million in costs over the next three years with roughly $100 million in savings in fiscal 2016, Keurig said in a statement.
The company said sales of its packaged coffee pods fell 1 percent, while sales of brewers and accessories plummeted 26 percent. Keurig cited high inventory levels in stores, and said it recorded lower net prices for brewers as retailers ran promotions to clear inventory.
"While we are not pleased with our revenue growth, we delivered earnings at the high end of our previous guidance," Keurig Chief Executive Brian Kelley said in a statement. "We are taking decisive actions to adapt and compete more effectively in today's rapidly-evolving, dynamic marketplace."
Keurig's net income fell to $113.6 million, or 73 cents a share, in the third quarter ended June 27 from $155.2 million, or 94 cents a share a year earlier. When adjusted for one off items, the company earned 80 cents a share.
Revenue fell 5.2 percent to $969.5 million.
Analysts were expecting adjusted earnings of 79 cents a share and revenue of $1.04 billion.
For the current fiscal year, the company forecast sales would decline in the low- to mid-single digits compared with last fiscal year. Wall Street analysts had expected sales to rise almost 1.5 percent.
The company also authorized the additional repurchase of up to $1 billion in shares over the next two years.
—CNBC.com contributed to this report.