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GMCR beat on the bottom line, but not the top…

COGS up 540 bps and SG&A down 610 basis points – You can only cut SG&A so much to make up for lower gross margins!. Despite incremental promotional expenses and a new manufacturing facility in TN, the company expects to get additional leverage on SG&A in 2009.

I still contend that by Q4 the signs of stress will be much more evident that they are today.

Did I mention they don’t generate enough operating cash flow to cover their capital needs and the stock trades at 17x EV/EBITDA!

Demand destruction at its best!