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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

__________

FORM 10-Q

[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended April 3, 2005

OR

[ ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

Commission file number 000-32233

PEET'S COFFEE & TEA, INC.
(Exact Name of Registrant as Specified in Its Charter)

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

1400 Park Avenue
Emeryville, California 94608-3520
(Address of Principal Executive Offices) (Zip Code)

(510) 594-2100
(Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Securities Exchange Act Rule 12b-2). Yes [X] No [ ]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, no par value
  
13,646,836
(Class)
  
(Outstanding at May 10, 2005)



 
1


     
 
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
10
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
15
Item 4.
Controls and Procedures
15
     
PART II
Other Information
  
     
Item 1.
Legal Proceedings
16
Item 6.
Exhibits
16
 
Signatures
  
     

 
2


PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

PEET’S COFFEE & TEA, INC.
  
           
CONSOLIDATED BALANCE SHEETS
  
(Unaudited, in thousands, except share amounts)
  
           
   
April 3,
  
January 2,
  
   
2005
  
2005
  
           
ASSETS
          
               
Current assets
              
  Cash and cash equivalents
  
$
16,243
  
$
11,356
  
  Accounts receivable, net
    
3,905
   
4,136
 
  Inventories
    
11,774
   
12,614
 
  Deferred income taxes
    
1,419
   
1,403
 
  Prepaid expenses and other
    
3,051
   
2,280
 
     Total current assets
    
36,392
   
31,789
 
               
Marketable securities
    
51,650
   
52,057
 
Property and equipment, net
    
42,814
   
40,588
 
Intangible and other assets, net
    
3,432
   
3,455
 
               
Total assets
  
$
134,288
  
$
127,889
  
               
               
               
LIABILITIES AND SHAREHOLDERS' EQUITY
              
               
Current liabilities
              
  Accounts payable
  
$
6,165
  
$
5,710
  
  Accrued compensation and benefits
    
5,156
   
4,266
 
  Deferred revenue
    
2,205
   
2,394
 
  Income tax payable
    
623
   
840
 
  Other accrued liabilities
    
2,865
   
2,532
 
     Total current liabilities
    
17,014
   
15,742
 
               
Deferred income taxes
    
812
   
838
 
Deferred lease credits and other long-term liabilities
    
2,536
   
2,182
 
     Total liabilities
    
20,362
   
18,762
 
               
               
Shareholders' equity
              
  Common stock, no par value; authorized 50,000,000 shares;
              
    issued and outstanding: 13,634,000 and 13,500,000 shares
    
95,500
   
93,091
 
  Accumulated other comprehensive loss, net of tax
    
(190
)
  
(152
)
  Retained earnings
    
18,616
   
16,188
 
               
      Total shareholders' equity
    
113,926
   
109,127
 
               
Total liabilities and shareholders' equity
  
$
134,288
  
$
127,889
  
               
See notes to consolidated financial statements.
              

 
3


 
PEET’S COFFEE & TEA, INC.
  
           
CONSOLIDATED STATEMENTS OF INCOME
  
(Unaudited, in thousands, except per share amounts)
  
       
   
Thirteen weeks ended
  
   
April 3,
  
March 28,
  
   
2005
  
2004
  
           
  Retail stores
  
$
27,283
  
$
22,697
  
  Specialty sales
    
12,705
   
9,899
 
Net revenue
    
39,988
   
32,596
 
               
Operating expenses:
              
  Cost of sales and related occupancy expenses
    
18,071
   
14,854
 
  Operating expenses
    
13,501
   
11,003
 
  Marketing and advertising expenses
    
831
   
876
 
  Depreciation and amortization expenses
    
1,680
   
1,319
 
  General and administrative expenses
    
2,194
   
1,717
 
               
     Total operating costs and expenses
    
36,277
   
29,769
 
               
Income from operations
    
3,711
   
2,827
 
               
Investment income, net
    
328
   
187
 
               
Income before income taxes
    
4,039
   
3,014
 
               
Income tax provision
    
1,611
   
1,205
 
               
Net income
  
$
2,428
  
$
1,809
  
               
Net income per share:
              
  Basic
  
$
0.18
  
$
0.14
  
  Diluted
  
$
0.17
  
$
0.13
  
               
Shares used in calculation of net income per share:
              
  Basic
    
13,564
   
13,099
 
  Diluted
    
14,169