Market Overview

Keurig Dr Pepper Down 5% After Q4 Print

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Keurig Dr Pepper Inc (NYSE: KDP) reported Thursday fourth-quarter results, which prompted a 5% sell-off in the stock.

What Happened

Keurig Dr Pepper said it earned 35 cents per share in the quarter on revenue of $2.93 billion versus expectations of 35 cents per share and $2.96 billion. Net sales were up 4.3% in the quarter due to a higher volume/mix of 5.3% and a foreign currency benefit of 0.1%, partially offset by unfavorable net price realization of 0.7%.

The company noted it saw market share gains in the quarter across multiple cold beverage categories. Retail consumption of single-serve coffee pods manufacturing by Keurig Dr Pepper grew by nearly 4%, according to industry data. The company said this tracking would be consistent with a 10% coffee pod shipment volume growth in the quarter.

Why It's Important

Keurig Dr Pepper noted its performance was "healthy across our portfolio" due to innovation, marketing, and in-store execution. Free cash flow in the quarter was described as "robust" which helps ongoing deleveraging.

Keurig Dr Pepper guided for net sales to grow 3.0% to 4.0% in 2020 which is above a prior merger target of 2.0% to 3.0%. Adjusted EPS growth is expected to be in the range of 13% to 15%, or $1.38 to $1.40 per share versus the Street's estimate of $1.40.

Over a three-year period, the company continues to expect to show EPS growth of 15% to 17%.

In a separate announcement, Keurig Dr Pepper said it entered into a new long-term agreement with Nestle to manufacture and distribute Starbucks Corporation (NASDAQ: SBUX) packaged K-Cup pods in the U.S. and Canada.

The stock was down 5.3% to $27.20 per share.

Related Links:

This Analyst Says 'Weak' Market Sentiment For Keurig Dr Pepper's Ready To Drink Portfolio Seems Unjustified

Morgan Stanley Upgrades Keurig Dr Pepper On Improved Valuation

 

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Posted-In: beverages coffee Cold Beverages Hot Beverages K CupEarnings News

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