Washington	91-0863396
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)

	PEET'S COFFEE & TEA, INC.
	INDEX
PART I	Financial Information
Item 1.	Financial Statements	3
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17
Item 4.	Controls and Procedures	18
PART II	Other Information
Item 1.	Legal Proceedings	18
Item 2.	Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities	18
Item 4.	Submission of Matters to a Vote of Security Holders	19
Item 6.	Exhibits and Reports on Form 8-K	19
	Signatures	20

	2

		June 27,			December 28,
		2004			2003
ASSETS
Current Assets
Cash and cash equivalents		$	8,924		$	30,263
Short-term investments			18,936			12,328
Accounts receivable			3,242			3,115
Income tax receivable			340			340
Inventories			13,294			10,720
Prepaid expenses and other			1,714			2,111
Total current assets			46,450			58,877
Property and equipment, net			34,973			32,322
Intangible and other assets, net			3,862			2,684
Long-term U.S. Government and Agency Securities			36,708			16,572
Total assets		$	121,993		$	110,455
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable		$	5,606		$	4,770
Accrued compensation and benefits			4,669			4,157
Accrued litigation expense			2,343			2,343
Other accrued liabilities			4,393			3,122
Total current liabilities			17,011			14,392
Deferred lease credits and other long-term liabilities			1,266			829
Total liabilities			18,277			15,221
Shareholders' equity
Common Stock, no par value; authorized 50,000,000 shares;
issued and outstanding 13,379,000 and 12,983,000			92,911			87,808
Accumulated other comprehensive income (loss), net of tax			(182	)		23
Retained earnings			10,987			7,403
Total shareholders' equity			103,716			95,234
Total liabilities and shareholders' equity		$	121,993		$	110,455
See notes to condensed consolidated financial statements.

	3

		Thirteen weeks ended						Twenty-six weeks ended
		June 27,			June 29,			June 27,			June 29,
		2004			2003			2004			2003
Retail stores		$	23,449		$	21,057		$	46,146		$	41,088
Specialty sales			10,102			8,023			20,001			15,390
Net revenue			33,551			29,080			66,147			56,478
Operating expenses:
Cost of sales and related occupancy expenses			15,359			13,273			30,213			25,989
Operating expenses			11,354			9,546			22,357			18,757
Marketing and advertising expenses			975			1,289			1,851			2,399
General and administrative expenses			1,786			1,493			3,503			2,862
Depreciation and amortization expenses			1,360			1,181			2,679			2,319
Total operating costs and expenses			30,834			26,782			60,603			52,326
Income from operations			2,717			2,298			5,544			4,152
Interest income, net			(241	)		(225	)		(428	)		(473	)
Income before income taxes			2,958			2,523			5,972			4,625
Income tax provision			1,183			984			2,388			1,804
Net income		$	1,775		$	1,539		$	3,584		$	2,821
Net income per share:
Basic		$	0.13		$	0.12		$	0.27		$	0.23
Diluted		$	0.13		$	0.12		$	0.26		$	0.22
Shares used in calculation of net income per share:
Basic			13,288			12,412			13,194			12,320
Diluted			14,013			13,100			13,813			12,948
See notes to condensed consolidated financial statements.

	4

		Twenty-six weeks ended
		June 27,			June 29,
		2004			2003
Cash flows from operating activities:
Net income		$	3,584		$	2,821
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			3,216			2,724
Tax benefit from exercise of stock options and amortization of discounted stock options			1,918			39
Other			99