Keurig Dr Pepper logged higher second-quarter sales as it sold more beverages at higher prices and made sequential progress with its U.S. coffee business https://t.co/Man8YIkJkK ...

Core Insights - Keurig Dr Pepper Inc. (KDP) reported second-quarter 2025 results with both revenue and earnings showing year-over-year improvement, exceeding the Zacks Consensus Estimate [1][6] - Adjusted earnings per share (EPS) reached 49 cents, reflecting an 8.9% increase year over year, aligning with expectations [1][6] - The growth in adjusted operating income was a key driver for the bottom-line improvement [1] Financial Performance - Net sales for the quarter were $4.16 billion, a 6.1% increase year over year, surpassing the Zacks Consensus Estimate of $4.14 billion [6][9] - On a constant-currency basis, net sales improved by 7.2%, supported by a 5% increase in volume/mix and a favorable net price realization of 2.2% [6] - Adjusted gross profit rose 4.0% year over year to $2.29 billion, while the adjusted gross margin decreased by 110 basis points to 55% [6] - Adjusted operating income increased by 5.9% year over year to $1.028 billion, driven by higher sales and productivity savings [7] Segment Performance - U.S. Refreshment Beverages segment sales increased by 10.5% year over year to $2.7 billion, supported by market share gains and the acquisition of GHOST [10][9] - U.S. Coffee segment sales slightly declined by 0.2% to $948 million, with pricing actions indicating early recovery signs despite a volume/mix decline [11][9] - International segment sales fell by 1.8% year over year to $555 million, but increased by 5.7% on a constant-currency basis [12] Financial Health - As of June 30, 2025, KDP had cash and cash equivalents of $509 million, long-term obligations of $13.9 billion, and total stockholders' equity of $24.9 billion [13] - Net cash provided by operating activities was $640 million, with free cash flow amounting to $427 million [13] 2025 Outlook - KDP reaffirmed its guidance for 2025, projecting mid-single-digit net sales growth and high-single-digit adjusted EPS growth on a constant currency basis [14] - Foreign currency translation is expected to be a nearly one percentage point headwind on growth for both top and bottom lines [14]

Core Insights - Keurig Dr Pepper, Inc (KDP) reported quarterly earnings of $0.49 per share, matching the Zacks Consensus Estimate, and showing an increase from $0.45 per share a year ago [1] - The company achieved revenues of $4.16 billion for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 0.65% and up from $3.92 billion year-over-year [2] - The stock has gained approximately 4.3% since the beginning of the year, underperforming compared to the S&P 500's gain of 8.1% [3] Earnings Performance - KDP's earnings for the previous quarter were initially expected to be $0.38 per share, but the actual earnings were $0.42, resulting in a surprise of +10.53% [1] - Over the last four quarters, KDP has surpassed consensus EPS estimates two times [1] Revenue Performance - The company has topped consensus revenue estimates three times over the last four quarters [2] - The current consensus EPS estimate for the upcoming quarter is $0.54, with expected revenues of $4.13 billion, and for the current fiscal year, the estimate is $2.04 on revenues of $16.22 billion [7] Market Outlook - The sustainability of KDP's stock price movement will largely depend on management's commentary during the earnings call [3] - The Zacks Industry Rank places Beverages - Soft drinks in the top 13% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] Estimate Revisions - The estimate revisions trend for KDP was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, suggesting it is expected to perform in line with the market [6] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions [5]

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for the quarterly period ended June 30, 2025 [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Reports a 6.1% increase in Q2 net sales to $4.2 billion and a 9.8% rise in H1 net income to $1.1 billion Condensed Consolidated Statements of Income (Q2 & First Six Months) | (in millions, except per share data) | Q2 2025 | Q2 2024 | YoY Change | First Six Months 2025 | First Six Months 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $4,163 | $3,922 | 6.1% | $7,798 | $7,390 | 5.5% | | **Gross profit** | $2,255 | $2,172 | 3.8% | $4,240 | $4,112 | 3.1% | | **Income from operations** | $898 | $861 | 4.3% | $1,699 | $1,626 | 4.5% | | **Net income** | $547 | $515 | 6.2% | $1,064 | $969 | 9.8% | | **Diluted EPS** | $0.40 | $0.38 | 5.3% | $0.78 | $0.70 | 11.4% | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to $54.4 billion, with stockholders' equity increasing to $25.0 billion as of June 30, 2025 Condensed Consolidated Balance Sheet Highlights | (in millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $4,606 | $3,997 | | **Goodwill** | $20,228 | $20,053 | | **Other intangible assets, net** | $23,841 | $23,634 | | **Total assets** | $54,368 | $53,430 | | **Total current liabilities** | $7,221 | $8,087 | | **Long-term obligations** | $13,920 | $12,912 | | **Total liabilities** | $29,383 | $29,187 | | **Total stockholders' equity** | $24,985 | $24,243 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations for the first six months decreased to $640 million from $742 million year-over-year Cash Flow Summary (First Six Months) | (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $640 | $742 | | **Net cash used in investing activities** | $(278) | $(329) | | **Net cash used in financing activities** | $(409) | $(222) | | **Net change in cash, cash equivalents, etc.** | $(47) | $191 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Details significant events including a $2 billion debt issuance, the Dyla acquisition, and ongoing litigation - On May 5, 2025, the company issued an aggregate principal amount of **$2 billion in new senior unsecured notes** to repay outstanding commercial paper[31](index=31&type=chunk) - On June 2, 2025, KDP completed the acquisition of Dyla, a powdered drink mix company, for aggregate consideration of **$98 million**[41](index=41&type=chunk) - The company is involved in a multidistrict antitrust litigation where plaintiffs claim over **$5 billion in damages**, for which no loss contingency has been accrued[97](index=97&type=chunk)[98](index=98&type=chunk) - A restructuring program for network optimization is expected to incur pre-tax charges of **$150 million to $170 million** through 2026[99](index=99&type=chunk)[100](index=100&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes financial results, highlighting a 6.1% Q2 net sales growth driven by the GHOST acquisition [Results of Operations](index=33&type=section&id=Results%20of%20Operations) Q2 consolidated net sales rose 6.1% to $4.2 billion, driven by the U.S. Refreshment Beverages segment Consolidated Operations Summary (Q2 2025 vs Q2 2024) | ($ in millions) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **Net sales** | $4,163 | $3,922 | 6.1% | | **Gross profit** | $2,255 | $2,172 | 3.8% | | **Income from operations** | $898 | $861 | 4.3% | | **Net income** | $547 | $515 | 6.2% | - The acquisition of GHOST was a significant driver of growth, contributing **4.0 percentage points** to consolidated volume/mix growth in Q2 2025[116](index=116&type=chunk)[128](index=128&type=chunk) Consolidated Operations Summary (First Six Months 2025 vs 2024) | ($ in millions) | First Six Months 2025 | First Six Months 2024 | % Change | | :--- | :--- | :--- | :--- | | **Net sales** | $7,798 | $7,390 | 5.5% | | **Gross profit** | $4,240 | $4,112 | 3.1% | | **Income from operations** | $1,699 | $1,626 | 4.5% | | **Net income** | $1,064 | $969 | 9.8% | [Results of Operations by Segment](index=35&type=section&id=Results%20of%20Operations%20by%20Segment) U.S. Refreshment Beverages sales grew 10.5%, while U.S. Coffee sales were flat and International sales declined Net Sales by Segment (Q2 2025 vs Q2 2024) | (in millions) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **U.S. Refreshment Beverages** | $2,660 | $2,407 | 10.5% | | **U.S. Coffee** | $948 | $950 | (0.2)% | | **International** | $555 | $565 | (1.8)% | - U.S. Coffee segment performance was impacted by a **22.6% decrease in appliance volume** and a **3.7% decrease in K-Cup pod volume** in Q2 2025[127](index=127&type=chunk)[131](index=131&type=chunk) - International segment net sales were significantly impacted by unfavorable foreign exchange, which had a **negative 7.5% effect** in Q2 2025[128](index=128&type=chunk)[149](index=149&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Details a strong liquidity position supported by cash from operations and a $4 billion credit facility - Principal sources of liquidity are cash from operations and a **$4 billion revolving credit agreement**[159](index=159&type=chunk) - Net cash provided by operating activities **decreased by $102 million** in the first six months of 2025 compared to the prior year[160](index=160&type=chunk) - No common stock was repurchased during the first six months of 2025, with **$1,810 million remaining available** under the program[167](index=167&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Reports no material changes to market risk disclosures from the most recent Annual Report on Form 10-K - There have been **no material changes** to the disclosures on market risk from the company's most recent Annual Report[179](index=179&type=chunk) [Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes in the quarter - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures are **effective**[181](index=181&type=chunk) - **No material changes** to internal control over financial reporting occurred during the quarter ended June 30, 2025[182](index=182&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) Refers to Note 15 for details on commitments, contingencies, and ongoing antitrust litigation - Information regarding legal proceedings is detailed in **Note 15** of the Notes to the Unaudited Consolidated Financial Statements[185](index=185&type=chunk) [Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) States no material changes from the risk factors disclosed in the company's Annual Report on Form 10-K - There have been **no material changes** from the risk factors set forth in the company's Annual Report[187](index=187&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Reports no share repurchases in Q2 2025, with $1.81 billion remaining under the current authorization - The company **did not repurchase any shares** during the second quarter of 2025 under its authorized share repurchase program[188](index=188&type=chunk) - As of June 30, 2025, **$1,810 million remained available** for repurchase under the current $4 billion authorization[188](index=188&type=chunk) [Other Information](index=46&type=section&id=Item%205.%20Other%20Information) Confirms no directors or executive officers adopted, modified, or terminated Rule 10b5-1 trading plans in Q2 - **No directors or executive officers** adopted, modified, or terminated any Rule 10b5-1 trading plans during the second quarter of 2025[190](index=190&type=chunk) [Exhibits](index=47&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the Form 10-Q, including certifications and corporate governance documents

Financial Data and Key Metrics Changes - The company reported a 7.2% increase in net sales in constant currency for Q2 2025, driven by both price and volume mix [30][31] - Gross margin contracted by 110 basis points due to inflationary pressures, despite pricing and productivity savings [32] - Operating income grew by 7% with operating margins remaining steady compared to the prior year [32] Business Line Data and Key Metrics Changes - U.S. Refreshment Beverages segment saw net sales grow by 10.5%, primarily driven by volume mix and the Ghost acquisition contributing 6.6 percentage points [33] - The U.S. Coffee segment experienced a slight decline of 0.2% in net sales, although there was notable sequential improvement from the first quarter [35] - International segment net sales increased by 5.7%, supported by net price realization and a slight volume mix increase [37][28] Market Data and Key Metrics Changes - The energy portfolio achieved a market share of 7%, up from below 1% just a few years ago, with a 30% retail sales growth in Q2 [19][20] - Electrolite, a sports hydration brand, registered over 30% retail sales growth and gained market share in its category [10] - The carbonated soft drink category remains strong, with Doctor Pepper and 7UP contributing to market share gains [50] Company Strategy and Development Direction - The company is focused on five strategic pillars aimed at long-term value creation, including brand building and portfolio reshaping [6] - The acquisition of Diala brands aims to expand KDP's presence in the powdered drink mixes and liquid water enhancers category [10] - The company is investing in its direct store delivery (DSD) network to enhance distribution efficiency and market presence [75][78] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from rising cost pressures and consumer caution but remains confident in achieving the full-year outlook [5][30] - The company expects some margin pressure in the second half of 2025 due to inflation and tariffs, but plans to manage these dynamics effectively [41][62] - There is optimism regarding the U.S. Coffee segment's long-term growth potential despite short-term challenges [62] Other Important Information - The company generated $325 million in free cash flow in Q2, with expectations for further acceleration in the second half [38] - The capital allocation strategy remains balanced, focusing on organic and inorganic investments, strengthening the balance sheet, and returning cash to shareholders [39] Q&A Session Summary Question: Evolution of U.S. Refreshment Portfolio - Management highlighted strong contributions from both the base business and new partner additions, with expectations for continued robust growth in the U.S. Refreshment Beverages segment [49][51] Question: Outlook for Coffee Segment - Management expressed satisfaction with sequential improvement in U.S. Coffee but noted challenges ahead due to commodity inflation and tariffs [56][60] Question: Top Line Growth Without Acquisitions - Management reaffirmed confidence in achieving mid-single-digit growth through existing business strategies and operational efficiencies [67][70] Question: Infrastructure for Doctor Pepper Brand - Management emphasized the importance of DSD and ongoing investments to enhance capabilities and support the addition of Doctor Pepper in new regions [75][78] Question: Pricing Dynamics in U.S. Liquid Refreshment Beverages - Management indicated positive net price realization driven by carbonated soft drinks and ongoing pricing strategies to address consumer affordability [84][88] Question: Marketing Changes and ROI - Management discussed a marketing transformation focused on data and digital strategies to enhance consumer engagement and drive demand [92][94] Question: Protein Beverage Space and Diala Acquisition - Management acknowledged the growing consumer interest in health and wellness, including protein beverages, and highlighted the strategic fit of the Diala acquisition in this context [99][102]

Financial Data and Key Metrics Changes - The company reported a strong enterprise growth with net sales increasing by 7% in Q2, driven by both price and volume mix [12][30] - Gross margin contracted by 110 basis points due to inflationary pressures, despite pricing and productivity savings [32] - EPS grew double digits in Q2, contributing to nearly 10% growth in the first half of the year [32] Business Line Data and Key Metrics Changes - U.S. Refreshment Beverages saw net sales grow almost 11%, with strong performance in carbonated soft drinks led by Doctor Pepper, 7UP, and Canada Dry [14][30] - The energy segment, including brands like Ghost and C4, contributed significantly, with Ghost adding four percentage points to the top line [33][19] - U.S. Coffee segment net sales declined modestly by 0.2%, but showed sequential improvement with a strengthening pod category [35][21] Market Data and Key Metrics Changes - International segment net sales increased by 6%, driven by pricing and market share gains in key categories [28][30] - The company gained market share in the U.S. liquid refreshment beverages, with Doctor Pepper on track for its ninth consecutive year of market share growth [51][30] - The energy portfolio achieved a 7% market share, up from below 1% just a few years ago [19][30] Company Strategy and Development Direction - The company is focused on long-term value creation through five strategic pillars, including brand building and portfolio reshaping [6][5] - The acquisition of Diala brands aims to expand presence in the powdered drink mixes and liquid water enhancers category [9][100] - The company is investing in its direct store delivery (DSD) network to enhance distribution efficiency and support growth [75][72] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from rising cost pressures and consumer caution but remains on track to achieve full-year outlook [5][30] - The company expects some margin pressure in the back half of the year due to inflation and tariffs, but anticipates continued top-line momentum [42][30] - Management expressed confidence in returning the U.S. Coffee segment to consistent long-term growth despite facing challenges [62][21] Other Important Information - The company generated $325 million in free cash flow in Q2, with expectations for further acceleration in the second half [39][30] - The capital allocation strategy remains balanced, focusing on organic and inorganic investments, strengthening the balance sheet, and returning cash to shareholders [40][30] Q&A Session Summary Question: Evolution of U.S. Refreshment Portfolio - Management highlighted strong contributions from both the base business and new partner additions, with expectations for continued robust growth [50][52] Question: Outlook for U.S. Coffee Segment - Management noted sequential improvement in U.S. Coffee but anticipated challenges in the back half due to commodity inflation and tariffs [56][62] Question: Pricing Dynamics in U.S. Liquid Refreshment Beverages - Management confirmed positive contributions from net price realization and emphasized the importance of monitoring consumer behavior in an inflationary environment [79][82] Question: Marketing Changes and ROI - Management discussed a marketing transformation focused on data and digital strategies to enhance consumer engagement and drive demand [90][92] Question: Protein Beverage Space and Diala Acquisition - Management acknowledged the growing consumer interest in health and wellness, including protein beverages, and expressed excitement about the Diala acquisition to penetrate this market [99][100]

Second Quarter 2025 Earnings Conference Call July 24, 2025 Safe Harbor and Non-GAAP Financial Measures Note Regarding Forward-Looking Statements: SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS © 2025 Ryder System, Inc. All Rights Reserved Certain statements and information included in this presentation are "forward-looking statements" under the Federal Private Securities Litigation Reform Act of 1995, including our expectations regarding: our forecast; our outlook; market conditions, s ...

EXHIBIT 99.1 Keurig Dr Pepper Reports Q2 2025 Results and Reaffirms Guidance for 2025 Strong Q2 Results Fueled by Healthy Top-Line Growth and Cost Discipline Momentum in U.S. Refreshment Beverages and International, with Improving U.S. Coffee Trends GAAP net income increased 6.2% to $547 million, or $0.40 per diluted share, including an unfavorable year-over-year impact of items affecting comparability. Adjusted net income increased 10.5% to $673 million and Adjusted diluted EPS increased 11.1% to $0.49. Ad ...

Core Insights - Keurig Dr Pepper Inc. reported strong Q2 results for 2025, with net sales increasing by 6.1% to $4.16 billion, driven by healthy growth in U.S. Refreshment Beverages and international markets, alongside improving trends in U.S. Coffee [1][3][4] - The company reaffirmed its fiscal 2025 guidance, expecting constant currency net sales growth in the mid-single-digit range and adjusted diluted EPS growth in the high-single-digit range [1][14] Financial Performance - **Net Sales**: Q2 net sales reached $4.16 billion, a 6.1% increase year-over-year, with a constant currency growth of 7.2% [2][3] - **Diluted EPS**: Reported diluted EPS was $0.40, reflecting a 5.3% increase compared to the previous year [2][5] - **Operating Income**: GAAP operating income rose by 4.3% to $898 million, while adjusted operating income increased by 7.0% to $1.028 billion, representing 24.7% of net sales [4][5] Segment Performance - **U.S. Refreshment Beverages**: Net sales increased by 10.5% to $2.7 billion, driven by volume/mix growth of 9.5% and favorable net price realization of 1.0% [7][8] - **U.S. Coffee**: Net sales slightly decreased by 0.2% to $0.9 billion, with a volume/mix decline of 3.8% offset by a favorable net price realization of 3.6% [9][10] - **International**: Net sales decreased by 1.8% to $0.6 billion, but increased by 5.7% on a constant currency basis, driven by favorable net price realization and volume/mix growth [11][12] Cash Flow and Guidance - **Cash Flow**: Operating cash flow for Q2 was $431 million, with free cash flow totaling $325 million [5] - **2025 Guidance**: The company expects a foreign currency translation headwind of approximately 0.5% to full-year growth, but remains confident in achieving its 2025 outlook [14]

Core Insights - Keurig Dr Pepper (KDP) is scheduled to release its earnings on July 24, 2025, with historical trends indicating a tendency for negative one-day returns post-announcement [2][3] - Analysts project earnings of $0.49 per share and sales of $4.14 billion for the upcoming quarter, reflecting growth from last year's earnings of $0.45 per share and sales of $3.92 billion [3] - The company has a market capitalization of $45 billion, with $16 billion in revenue over the last twelve months, resulting in operating profits of $3.3 billion and a net income of $1.5 billion, showcasing strong operational profitability [4] Historical Performance - Over the past five years, KDP has recorded 15 earnings data points, with 7 positive and 8 negative one-day returns, resulting in positive returns approximately 47% of the time [7] - The median of the 7 positive returns is 2.4%, while the median of the 8 negative returns is -1.9% [7] - The percentage of positive one-day returns increases to 67% when analyzing data from the last 3 years [7] Trading Strategies - Traders may consider establishing positions prior to the earnings announcement based on historical probabilities [6] - Post-earnings analysis can help traders evaluate the relationship between immediate and medium-term returns to inform their positioning [6] - A strategy involving the correlation between short-term and medium-term returns can be employed, particularly if a strong correlation exists between 1D and 5D returns [8]