Market Overview

Financial Investigator Warns About Green Mountain Coffee Roasters

The Financial Investigator raised some questions about Green Mountain Coffee Roasters (NASDAQ: GMCR) in a post on Monday.

In the post, Financial Investigator noted that while the company has appeared to defy critics quarter after quarter—inking a deal with Starbucks (NASDAQ: SBUX) and steadily seeing higher revenues—there are some definitive questionable accounting practices occurring within the company.

FI notes that Sam Antar, accounting expert, questioned the company's practice in a blog post. Apparently, in its 10-Q, the company had reversed out a $22.5 million provision for sales returns.

Interestingly, rather than deal with the matter outright, the company chose to explain its practices only to major brokers and hedge fund managers. That could be seen as a violation of the principles of consistency and comparability.

Additionally, it should be noted that the SEC launched an inquiry into the company last September.

Overall, FI believes that, while the company may be solid at the present time, these accounting questions could prove to be problematic for investors in the future.

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