In this photo illustration, cans of Dr Pepper soft drink are shown on June 3, 2024 in San Anselmo, California.
Justin Sullivan | Getty Images
Keurig Dr. Pepper reported quarterly earnings and revenue on Thursday that met analysts' expectations as higher prices boosted its U.S. soft drink sales.
The company's shares rose 5% in morning trading.
Here's what the company reported compared to what Wall Street expected, according to a survey of analysts by LSEG:
- Earnings per share: 45 cents adjusted, in line with estimates
- Revenue: $3.92 billion, in line with estimates
The beverage company reported second-quarter net income of $515 million, or 38 cents per share, up from $503 million, or 36 cents per share, a year earlier.
Excluding additional items, Keurig Dr Pepper earned 45 cents per share.
Net sales Total revenue increased 3.5% to $3.92 billion. Volume, which excludes price and currency changes, increased 1.8% during the quarter, while prices increased 1.6% compared to the same period last year.
Keurig's Dr Pepper soft drink division in the United States, which includes Snapple, Canada Dry and Sunkist, reported sales growth of 3.3%. Prices for its beverages rose 2.9% compared with the same period a year earlier. Its Dr Pepper Creamy Coconut drink was the company's most successful limited-time beverage.
Dr Pepper also recently surpassed Pepsi as the second most consumed soft drink in the U.S., behind only Coca ColaAccording to Beverage Digest, its parent company's main rivals have seen their results diverge in recent quarters: PepsiCo's price hikes have driven some consumers away from its drinks and snacks, while Coca-Cola's premium offerings such as Fairlife and strong international demand have bolstered its results.
While soda sales have been resilient, sales of still beverages and even energy drinks are under greater pressure due to the “uneven” consumer environment, Keurig Dr Pepper executives said on a conference call.
Keurig Dr Pepper’s U.S. coffee division sales fell 2.1% to $1 billion in the quarter, driven by a 2.9% drop in prices. Shipments of its K-Cup pods were virtually flat, which the company attributed to strong market share trends.
The company is also investing in marketing that emphasizes how drinking coffee at home is more affordable than buying it at a cafe, hoping to attract thrifty shoppers. It has also been foraying into cold brew with K-Cup cold brew pods and other new products to try to win over loyal Starbucks and Dunkin' fans.
While cold drinks account for about three-quarters of Starbucks' sales, cold brew accounts for less than 20% of at-home coffee drinking occasions, Keurig Dr Pepper CEO Tim Cofer said on the conference call.
The company's international division saw sales rise 15.5% in the quarter, but accounts for less than one-sixth of Keurig Dr Pepper's revenue.
The company also reiterated its prior full-year outlook of constant-currency revenue growth in the mid-single-digit range and adjusted earnings per share growth in the high-single-digit range.
