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Keurig Dr Pepper Inc. KDP posted first-quarter 2024 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. Both top and bottom lines also improved year over year.
Adjusted earnings per share (EPS) of 42 cents grew 10.5% year over year and outpaced the Zacks Consensus Estimate of 38 cents. The bottom-line improvement was driven by strong growth in adjusted operating income and a realized gain on the sale of an investment in Vita Coco. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Keurig Dr Pepper, Inc Price, Consensus and EPS Surprise
Keurig Dr Pepper, Inc price-consensus-eps-surprise-chart | Keurig Dr Pepper, Inc Quote
The top-line performance was fueled by strong double-digit gains in U.S. Refreshing Beverages and solid trends in its International segment, which more than offset a challenging quarter in U.S. Coffee. This success was driven by continued momentum across key categories and brands, high-quality commercial execution and disciplined expense management. The company also extended its long-standing partnership with Vita Coco, reinforcing its strategic growth platform.
This Zacks Rank #3 (Hold) company’s shares have gained 8.3% in the past three months compared with the industry’s 8.9% growth.
KDP Stock's Three-Month Price Performance
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KDP’s Quarterly Performance
Net sales of $3.64 billion increased 4.8% year over year on a reported basis and surpassed the Zacks Consensus Estimate of $3.56 billion. On a constant-currency basis, net sales improved by 6.4%, backed by a 3.6% increase in volume/mix and a favorable net price realization of 2.8%.
The adjusted gross profit rose 1.8% year over year to $1.99 billion, while the adjusted gross margin fell 170 basis points (bps) to 54.6%.
The adjusted operating income rose 3.9% year over year to $847 billion due to higher sales, productivity savings and overhead efficiencies, partly negated by the impacts of inflation. Meanwhile, the adjusted operating margin contracted 50 bps year over year to 23.3%.
A Look at KDP’s Segmental Details
Sales in the U.S. Refreshment Beverages segment totaled $2.32 billion, up 11% year over year, reflecting 3% higher net price realization and 8% growth in volume/mix. This growth was supported by market share gains across key categories, including carbonated soft drinks, energy drinks and sports hydration. Additionally, the recent acquisition of GHOST contributed positively to the segment’s performance. The Zacks Consensus Estimate for the U.S. Refreshment Beverages segment was pegged at $2.23 billion for the first quarter of 2025.
Sales in the U.S. Coffee segment dipped 3.7% year over year to $877 million, reflecting net price realization improvement of 1.5%, somewhat offset by volume/mix decline of 5.2%. The decline in volume/mix was primarily driven by the timing of category pricing actions taken in response to rising green coffee costs. The Zacks Consensus Estimate for the U.S. Coffee segment’s sales was pegged at $885 billion.
Sales in the International segment fell 6.3% year over year to $435 million. On a constant-currency basis, the segment’s net sales increased 5.4%, gaining from a favorable net price realization of 4.1% and a volume/mix rise of 1.3%. The Zacks Consensus Estimate for the International segment’s sales was $448 million for the first quarter.