For Keurig Dr Pepper, the fourth quarter included sales and income gains, including a Wall Street beat on earnings, even as the coffee segment lagged.
Company net income was $693 million, or 49 cents per diluted share, versus $453 million, or 32 cents per diluted share, in the year-previous quarter. Adjusted for one-time events, net income was $770 million, or 55 cents per diluted share, compared to $714 million, or 50 cents per diluted share, in the year-before period, Keurig Dr Pepper stated.
Net income performance primarily reflected an increase in operating income and the favorable year-over-year impact of non-operating items affecting comparability, according to the company, partly offset by a higher year-over-year tax rate. Adjusted net income growth resulted from adjusted operating income growth and a benefit from Nutrabolt equity method earnings, partly offset by a higher year-over-year tax rate. Fewer diluted shares outstanding also affected the metric.
A Yahoo Finance-published analyst consensus estimate had adjusted diluted earnings coming in at 54 cents and revenues at $3.91 billion.
Net sales gained 1.7% to $3.87 billion versus the year-earlier quarter, while, on a constant currency basis, net sales increased 1.1% year over year in the period driven by net price realization of 4.8%, partly offset by lower volume/mix of 3.7%.
Operating income increased 40.1% to $943 million from the year-prior quarter, while adjusted operating income advanced 6.5% to $1.1 billion.
In the U.S. Coffee segment, net sales for the quarter decreased 9.9% to $1.16 billion year over year in the quarter, while operating income decreased 2.5% to $383 million and adjusted operating income slipped 2.8% to $423 million, Keurig Dr Pepper indicated. Meanwhile, in the U.S. Refreshment Beverages segment, net sales for the period increased 6.8% to $2.21 billion year over year in the period while operating income increased 69% to $688 million and adjusted operating income gained 20.2% to $713 million.
In the full fiscal year, company net income was $2.18 billion, or $1.55 per diluted share, versus $1.44 billion, or $1.01 per diluted share, in the year previous. Adjusted net income for the year advanced was $2.52 billion, or $1.79 per diluted share, compared to $2.4 billion, or $1.68 per diluted share, in the year before, the company maintained.
Net sales gained 5.4% to $14.81 billion, or 4.9% on a constant currency basis, from the year earlier. Operating income increased 22.5% to $3.19 billion from the year prior, while adjusted operating income advanced 2.8% to $3.7 billion.
Keurig Dr. Pepper Chairman and CEO Bob Gamgort called 2023 “a year of significant progress for KDP. Broad-based market share gains across our portfolio and entries into attractive white spaces supported our revenue momentum. Gross margin expansion resumed as the relationship between inflation, pricing and our redoubled productivity efforts improved throughout the year and helped fund investments in our brands and capabilities. We delivered on our financial commitments while simultaneously enhancing the composition of our earnings profile and strengthening our balance sheet. We now enter 2024 with a high-quality foundation from which to grow as we target performance in line with our long-term financial algorithm. Moreover, we head into 2024 with confidence and strategic focus, bolstered by our bold challenger culture and a refreshed, energized executive leadership team.”
