Keurig Dr. Pepper reported a 4.7% year-over-year gain in net sales from its coffee systems in its fiscal third quarter. Net sales for the quarter increased by $1.21 billion, compared to $1.16 billion in the year-ago period.
On a constant currency basis, net sales from Keurig coffee systems advanced year over year by 5.2%. A higher net price realization of 7.8% for coffee systems in the quarter was attributed by the company to pricing actions taken in late 2021 and the second quarter of 2022, according to Keurig Dr. Pepper. The company reported a volume/mix decrease of 2.6% from pod shipment growth of 3.5%, offset by a brewer shipment decline of 15%. Keurig coffee brewer performance in the third quarter, the company reported, is consistent with its anticipated return to its long-term target of adding two million new households into the Keurig system in 2022, which now requires selling fewer brewers than the COVID-driven, elevated level of three million new households having been added in each of the prior two years.
GAAP operating income from Keurig coffee systems in the third quarter of 2022 decreased 19.2% to $295 million, compared to $365 million in the year-ago period. The company cited broad-based inflationary pressure, primarily in green coffee costs, which reached the highest level of the year for Keurig Dr. Pepper because of the timing of the company’s hedges. Adjusted operating income decreased 15.7% to $343 million and, on a percent of net sales basis, totaled 28.4%.
Retail dollar consumption of single-serve pods manufactured by Keurig Dr. Pepper increased by 4.0% in IRI-tracked channels, the company reported. This was led by higher pricing in Keurig-owned and -licensed and partner brands, with stronger growth registered in untracked channels, according to the company.