Keurig Dr Pepper announced its quarterly earnings and revenue, meeting analysts’ expectations. The company’s performance was buoyed by increased U.S. soda sales, driven by higher prices.
In its second-quarter report, Keurig Dr Pepper posted a net income of $515 million, or 38 cents per share, up from $503 million, or 36 cents per share, the previous year. On an adjusted basis, the company earned 45 cents per share. Revenue rose by 3.5% to $3.92 billion, matching analyst predictions. Sales volume, excluding pricing and currency changes, increased by 1.8%, while prices were up by 1.6% compared to the same period last year.
The company’s U.S. refreshment beverages division, which includes brands like Snapple, Canada Dry, and Sunkist, saw a 3.3% growth in sales. Notably, the Dr Pepper Creamy Coconut drink was highlighted as the most successful limited-time offering. According to Beverage Digest, Dr Pepper recently surpassed Pepsi to become the second-most consumed soda in the U.S., behind only Coca-Cola.
Despite strong soda sales, Keurig Dr Pepper executives noted pressure in the market for still beverages and energy drinks, attributing this to an “uneven” consumer environment. The company’s U.S. coffee division experienced a 2.1% decline in sales, totaling $1 billion for the quarter, with a 2.9% drop in pricing. While shipments of K-Cup pods remained steady, the company is focusing on marketing strategies that highlight the affordability of home-brewed coffee compared to coffee shop prices. They are also expanding into the cold coffee market, aiming to attract fans of Starbucks and Dunkin’.
Keurig Dr Pepper’s international division reported a 15.5% increase in sales for the quarter, though this segment represents less than one-sixth of the company’s total revenue.
The company reaffirmed its full-year outlook, projecting constant currency revenue growth in the mid-single-digit range and adjusted earnings per share growth in the high single digits. Shares of Keurig Dr Pepper rose 5% following the earnings report, reflecting investor confidence in the company’s continued growth and strategic focus on key product areas.
