In the second quarter, Keurig Dr Pepper recorded net earnings that matched a Wall Street estimate and sales that narrowly topped the forecast, with unit volume increasing in coffee machines and K-cups.
In the U.S. Coffee segment, net sales slipped 2.1% to $1 billion in the quarter year over year, with a net price decline of 2.9% offsetting volume/mix growth of 0.8%, Keurig Dr Pepper maintained. K-Cup Pod shipments advanced 0.2% in the period year over year, led by market share trends in the company’s owned and licensed portfolio. Brewer shipments totaled 10.1 million for the 12 months ending June 30, increasing 1.4% versus the like period a year past, a development that reflected continued Keurig market share momentum, the company noted.
Segment operating income slid 8.8% to $228 million in the period year over year primarily due to certain unfavorable year-over-year impacts from items affecting comparability, Keurig Dr Pepper stated. Adjusted for one-time events, operating income grew 0.3% to $293 million or 30.8% of net sales, reflecting the benefit of net productivity offset by targeted value investments.
Company-wide, Keurig Dr Pepper’s net income was $515 million, or 38 cents per diluted share, versus $503 million, or 36 cents per diluted share, in the year-earlier quarter. Adjusted for one-time events, net income was $618 million, or 45 cents per diluted share, versus $596 million, or 42 cents per diluted share, the company indicated.
An analyst consensus estimate called for earnings of 45 cents per adjusted diluted share and revenue of $3.91 billion.
Net sales were $3.92 billion versus $3.79 billion in the year-before quarter. Income from operations was $861 million compared with $769 million in the period a year past, while adjusted operating income increased 11% to $970 million and totaled 24.7% of net sales, Keurig Dr Pepper pointed out.
In the International segment during the quarter, net sales increased 15.5% to $600 million year over year or 14.7% on a constant currency basis, while operating income increased 33.9% to $150 million and adjusted operating income increased 30.2% to $152 million, and totaled 26.9% of net sales.
Net sales in the U.S. Refreshment Beverage segment increased 3.3% to $2.4 billion year over year while operating income increased 14% to $717 million and adjusted operating income increased 11.9% to $723 million and totaled 30.% of net sales.
In announcing the financial results, Keurig Dr Pepper CEO Tim Cofer said, “Our second quarter results were healthy, with accelerating net sales trends, significant margin expansion, and solid EPS growth. Strong execution drove our performance as we continued to advance our long-term strategic agenda. Our consumer-centric innovation model is resonating in the market, our portfolio expansion to higher growth categories is ongoing, and we are actively enhancing an already robust route-to-market, all underpinned by an unrelenting focus on cost efficiency and capital discipline. Now halfway through 2024, we are on track to achieve our unchanged full-year outlook while also seeding initiatives to fuel consistent growth over multiple years.”
