Keurig Dr Pepper Beats Q1 Estimates, Reaffirms FY25 Outlook Despite Coffee Sales Dip

Keurig Dr Pepper Inc. KDP shares are trading lower on Thursday after the company reported first-quarter results.

The Frisco, Texas-based company reported adjusted earnings per share of 42 cents, beating the street view of 38 cents. The metric soared 10.5%, driven by the growth in adjusted operating income and a realized gain on the sale of investment in Vita Coco.

Quarterly sales of $3.63 billion beat the analyst consensus estimate of $3.56 billion. On a constant currency basis, net sales advanced 6.4%, driven by volume/mix growth of 3.6% and favorable net price realization of 2.8%. The acquisition of GHOST contributed 2.9 percentage points to volume/mix growth.

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U.S. Refreshment Beverages net sales for the first quarter increased 11% to $2.3 billion, while U.S. Coffee net sales decreased 3.7% to $0.9 billion. International net sales for the first quarter decreased 6.3% to $0.4 billion.

Adjusted gross margin at quarter end was 54.7%, compared with 56.3% in the year-ago period.

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Adjusted operating income increased 3.9% to $847 million and totaled 23.3% of net sales, driven by net sales growth, productivity savings, and overhead efficiencies, 

The company exited the quarter with cash and equivalents worth $653 million. Inventories at quarter-end totaled $1.539 billion.

Outlook: Keurig Dr Pepper reaffirmed its fiscal 2025 guidance for constant currency net sales growth in a mid-single-digit range and Adjusted diluted EPS growth in a high-single-digit range.

Price Action: KDP shares are trading lower by 0.50% to $35.03 at last check Thursday.

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