| Imagery Source: Food Business Middle East & Africa |
| Information Source: Keurig Dr Pepper Inc |
| Strong Q1 Results Driven by Top-Line Momentum and Operational Discipline |
| Double-Digit Net Sales Growth in U.S. Refreshment Beverages |
| Company Reaffirms 2025 Constant Currency Net Sales and Adjusted EPS Outlook |
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Keurig Dr Pepper Inc. (NASDAQ: KDP) today reported results for the first quarter of 2025 and reaffirmed its full year guidance. |
| Commenting on the results, CEO Tim Cofer stated, "Our first quarter performance represented a strong start to the year. We delivered healthy top and bottom-line growth, driven by momentum in key categories and brands, high-quality commercial execution, and disciplined expense management. We also advanced our strategic initiatives and evolved KDP's leadership and governance, which continued with today's addition of two new independent directors to our Board of Directors. Our reaffirmed full year outlook incorporates our latest view of changing market conditions, and we expect another solid year of growth in 2025." |
| First Quarter Consolidated Results |
| Net sales for the first quarter increased 4.8% to $3.6 billion. On a constant currency basis, net sales advanced 6.4%, driven by volume/mix growth of 3.6% favourable net price realisation of 2.8%. The acquisition of GHOST contributed 2.9 percentage points to volume/mix growth. |
| GAAP operating income increased 4.7% to $801 million, aided by a favourable year-over-year impact of items affecting comparability. Adjusted operating income increased 3.9% to $847 million and totalled 23.3% of net sales. GAAP and Adjusted operating income growth was driven by net sales growth, productivity savings, and overhead efficiencies, partially offset by the impact of inflationary pressures. |
| GAAP net income increased 13.9% to $517 million, or $0.38 per diluted share, aided by the favourable year-over-year impact of items affecting comparability. Adjusted net income increased 8.5% to $568 million, and Adjusted diluted EPS increased 10.5% to $0.42. Adjusted diluted EPS growth was driven by the Adjusted operating income growth and a realised gain on the sale of our investment in Vita Coco. |
| Operating cash flow for the first quarter was $209 million, and free cash flow totalled $102 million. |
| First Quarter Segment Results |
| U.S. Refreshment Beverages |
| Net sales for the first quarter increased 11.0% to $2.3 billion, driven by volume/mix growth of 8.0% and favourable net price realisation of 3.0%. Segment growth reflected market share gains in carbonated soft drinks, energy, and sports hydration, as well as the acquisition of GHOST. |
| GAAP operating income increased 6.3% to $654 million, which included an unfavourable year-over-year impact of items affecting comparability. Adjusted operating income increased 8.7% to $676 million and totalled 29.1% of net sales. GAAP and Adjusted operating income growth was driven by net sales growth and productivity savings, partially offset by the impact of inflationary pressures and lapping a larger earned C4 performance incentive in the year-ago period. |
| U.S. Coffee |
| Net sales for the first quarter decreased 3.7% to $0.9 billion. Favourable net price realisation of 1.5% was more than offset by a volume/mix decline of 5.2%. The timing of category pricing actions implemented in reaction to escalating green coffee costs weighed on volume/mix trends in the quarter. |
| GAAP operating income decreased 18.5% to $202 million, which included an unfavourable year-over-year impact of items affecting comparability. Adjusted operating income decreased 12.5% to $253 million and totalled 28.8% of net sales. GAAP and Adjusted operating income reflected the net sales decline and the impact of inflationary pressures, which more than offset productivity savings. |
| International |
| Net sales for the first quarter decreased 6.3% to $0.4 billion. On a constant currency basis, net sales increased 5.4%, driven by favourable net price realisation of 4.1% and volume/mix growth of 1.3%. Refreshment beverages momentum, including in mineral water and carbonated soft drinks, was strong across Canada and Mexico. |
| GAAP operating income decreased 19.6% to $90 million, including an unfavourable impact from foreign exchange translation and an unfavourable year-over-year impact of items affecting comparability. Adjusted operating income decreased 4.6% to $93 million and totalled 21.4% of net sales. GAAP and Adjusted operating income reflected the impact of inflationary pressures and higher SG&A costs, which more than offset net sales growth and productivity savings. |
| 2025 Guidance |
| The 2025 guidance provided below is presented on a constant currency, non-GAAP basis. The Company does not provide reconciliations of such forward-looking non-GAAP measures to GAAP measures, due to the inability to predict the amount and timing of impacts outside of the Company's control on certain items, such as non-cash gains or losses resulting from mark-to-market adjustments of derivative instruments, among others, which could be material. Reconciling such items would require unreasonable efforts. |
| KDP 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. At current rates, foreign currency translation is forecasted to approximate a one percentage point headwind to full year top- and bottom-line growth. |
| Board Appointments |
| In a separate press release today, the Company announced the appointment of two new independent directors to its Board of Directors effective April 24, 2025. |
| For the full document, click the link below |
| Keurig Dr Pepper Inc |
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