Industry Overview - The global beverage industry is transforming, with a focus on health-conscious and convenience-driven products, moving beyond traditional carbonated soft drinks [1][2] - The competition is primarily between Coca-Cola Company (KO) and Keurig Dr Pepper Inc. (KDP), each with distinct strengths and strategies [1][2] Coca-Cola Company (KO) - Coca-Cola has over 130 years of brand equity and operates in more than 200 countries, commanding a significant market share across various beverage categories [2][5] - Approximately 30% of Coca-Cola's volume comes from low- or no-calorie beverages, aligning with consumer health preferences [5] - The company's "all-weather" business strategy includes a diverse product range, from classic sodas to health-focused options, and adapts pricing and packaging to consumer affordability [6] - Coca-Cola invests in digital innovation and marketing personalization, utilizing platforms like Studio X for localized marketing and enhancing consumer experiences through connected packaging [7] Keurig Dr Pepper Inc. (KDP) - KDP has established itself as a significant player in the beverage industry, with a diverse portfolio that includes carbonated soft drinks, premium coffee, and energy beverages [8][10] - The company's strategy balances short-term execution with long-term brand building, focusing on innovation and expanded distribution [10] - KDP is attuned to emerging demographics and trends, introducing brands that resonate with younger, health-conscious consumers and leveraging data-driven marketing for brand relevance [11] Financial Performance - The Zacks Consensus Estimate for Coca-Cola's 2025 sales and EPS indicates year-over-year growth of 2.4% and 2.9%, respectively [12] - In contrast, KDP's 2025 sales and EPS estimates suggest a higher growth of 5.6% and 6.1% [14] - Coca-Cola trades at a forward P/E ratio of 23.45X, above the industry average, while KDP trades at a lower multiple of 16.19X, indicating it as a more value-oriented option [15][17] Stock Performance - Over the past year, Coca-Cola stock has gained 13.7%, outperforming KDP and the broader industry's decline [17] - Despite KDP's lower valuation, Coca-Cola's stronger stock performance and growth trajectory provide it with an edge [17][19] Conclusion - Coca-Cola maintains a commanding edge in global scale, brand equity, and consumer loyalty, despite KDP's rising influence and innovation [18][19] - For investors seeking stability and long-term value creation, Coca-Cola is positioned as the stronger choice [19]

Core Insights - Keurig Dr Pepper Inc. (KDP) is currently undervalued with a forward 12-month P/E ratio of 16.04X, lower than the industry average of 18.31X and the sector average of 17.39X [1][4] - KDP shares have appreciated 5.9% in the last three months, outperforming the Zacks Beverages - Soft Drinks industry's growth of 1% and the broader Consumer Staples industry's return of 3.5% [4] Valuation Picture - The stock offers compelling value to investors seeking exposure to the consumer staple sector [4] Performance Analysis - KDP's strong performance in Q1 2025 is attributed to its consumer-focused innovation model, which has driven market share gains in key categories such as liquid refreshment beverages, K-Cup pods, and brewers [6][10] - The company achieved a 4.8% year-over-year increase in net sales, or 6.4% on a constant-currency basis, in Q1 2025, with a 3.6% rise in volume/mix and a 2.8% benefit from favorable pricing [10] Segment Growth - The U.S. Refreshment Beverages segment saw sales reach $2.32 billion in Q1 2024, marking an 11% year-over-year increase, supported by an 8% rise in volume/mix and a 3% increase in net price realization [11] - Strong performance in liquid refreshment beverages was driven by brands like Peñafiel and core offerings such as Dr Pepper and Crush, with the acquisition of GHOST enhancing the energy drink portfolio [12] Future Outlook - The Zacks Consensus Estimate for KDP's 2025 earnings has increased by a penny in the past 30 days, indicating positive sentiment [13] - For 2025, the consensus estimates imply 5.61% and 6.25% year-over-year growth in sales and EPS, respectively [13] Strategic Initiatives - KDP's growth reflects a strategic combination of innovation, brand activity, and strong commercial execution, with a focus on cost efficiency and disciplined capital management [7] - The company has strengthened its distribution network with new territory expansion in Tennessee and enhanced its Direct Store Delivery network in Mexico [9]

Group 1 - Keurig has launched its first-ever "Price Lock Event," allowing new auto-delivery subscribers to lock in K-Cup® pod prices through the end of 2025, providing stability against market fluctuations [1][2] - The Price Lock Event runs from April 23 to May 23, with no commitment required, allowing consumers to skip, swap, or cancel anytime while benefiting from locked-in pricing [2][4] - New subscribers can save 25% and secure their discounted price through the end of the year, with an option to purchase starter kits for $49.99, which includes premium brewers and locked-in beverage pricing [6] Group 2 - Keurig Dr Pepper is a leading beverage company in North America with annual revenue exceeding $15 billion and a diverse portfolio of over 125 brands [4] - The company holds leadership positions in various beverage categories, including coffee, and has the 1 single-serve coffee brewing system in the U.S. and Canada [4] - Keurig aims to enhance beverage experiences while making a positive impact on communities and the planet, driven by its purpose to "Drink Well. Do Good." [4]

Core Insights - Hispanic consumers are reducing grocery spending across various categories, impacting companies like Coca-Cola, Constellation Brands, and Colgate-Palmolive [1][4][19] - The U.S. Latino economy grew to $3.6 trillion in 2022, indicating significant purchasing power among Hispanic consumers [3] - Concerns over immigration policies and economic conditions are leading to decreased consumer confidence and spending among Hispanic shoppers [4][5][7] Company Impact - Constellation Brands reported a weaker-than-expected outlook for fiscal 2026, attributing it to tariffs and reduced spending from Hispanic consumers [6] - Coca-Cola is experiencing decreased traffic from Hispanic shoppers, partly due to a boycott linked to immigration policy concerns [14][15] - Colgate-Palmolive noted a 2.3% decline in North American volume for Q1, with lower traffic from Hispanic consumers affecting overall business [19] Market Trends - Hispanic consumers are driving a decline in consumer net purchase intent, with a notable drop in spending on non-alcoholic beverages and cooking oils [4][11][17] - The Latino unemployment rate increased to 5.2% in April, contributing to consumer concerns and spending pullback [7] - Social gatherings, a key area for Hispanic consumers' beer consumption, are declining, further impacting sales in the beverage sector [8]

Core Insights - Keurig Dr Pepper Inc. (KDP) reported first-quarter 2024 results with earnings and revenues exceeding the Zacks Consensus Estimate, showing year-over-year improvement [1][2] Financial Performance - Adjusted earnings per share (EPS) reached 42 cents, a 10.5% increase year over year, surpassing the Zacks Consensus Estimate of 38 cents [2] - Net sales amounted to $3.64 billion, reflecting a 4.8% year-over-year increase and exceeding the Zacks Consensus Estimate of $3.56 billion [6] - On a constant-currency basis, net sales improved by 6.4%, driven by a 3.6% increase in volume/mix and a favorable net price realization of 2.8% [6] - Adjusted gross profit rose 1.8% year over year to $1.99 billion, while adjusted gross margin decreased by 170 basis points to 54.6% [6] Segment Performance - U.S. Refreshment Beverages segment sales totaled $2.32 billion, up 11% year over year, supported by market share gains and the acquisition of GHOST [8] - U.S. Coffee segment sales declined 3.7% year over year to $877 million, impacted by a 5.2% decline in volume/mix due to pricing actions related to rising green coffee costs [10] - International segment sales fell 6.3% year over year to $435 million, but increased by 5.4% on a constant-currency basis [11] Operational Efficiency - Adjusted operating income increased by 3.9% year over year to $847 million, aided by higher sales and productivity savings, despite inflationary pressures [7] - Adjusted operating margin contracted by 50 basis points year over year to 23.3% [7] Financial Health - As of March 31, 2025, KDP had cash and cash equivalents of $653 million, long-term obligations of $12 billion, and total stockholders' equity of $24.4 billion [12] - Net cash provided by operating activities was $209 million, with free cash flow amounting to $102 million [12] Future 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 [13] - Foreign currency translation is expected to be a nearly one percentage point headwind on growth for the current year [13]

For the quarter ended March 2025, Keurig Dr Pepper, Inc (KDP) reported revenue of $3.64 billion, up 4.8% over the same period last year. EPS came in at $0.42, compared to $0.38 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $3.56 billion, representing a surprise of +2.01%. The company delivered an EPS surprise of +10.53%, with the consensus EPS estimate being $0.38.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- an ...

Keurig Dr Pepper, Inc (KDP) came out with quarterly earnings of $0.42 per share, beating the Zacks Consensus Estimate of $0.38 per share. This compares to earnings of $0.38 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 10.53%. A quarter ago, it was expected that this company would post earnings of $0.57 per share when it actually produced earnings of $0.58, delivering a surprise of 1.75%.Over the last four quarters, the comp ...

Financial Performance - Net sales for the first quarter of 2025 were $3,635 million, an increase of 4.8% compared to $3,468 million in the first quarter of 2024[11] - Gross profit for the first quarter of 2025 was $1,985 million, up from $1,940 million in the same period last year, reflecting a gross margin of approximately 54.6%[11] - Net income for the first quarter of 2025 was $517 million, representing a 14% increase from $454 million in the first quarter of 2024[11] - Earnings per share (EPS) for the first quarter of 2025 were $0.38, compared to $0.33 in the first quarter of 2024, indicating a 15.2% year-over-year growth[11] - Income from operations for the first quarter of 2025 was $801 million, compared to $765 million in the same period of 2024, reflecting a 4.7% increase[71] - The U.S. Refreshment Beverages segment generated net sales of $2,323 million in Q1 2025, up from $2,093 million in Q1 2024, representing an increase of 11%[72] - The U.S. Coffee segment reported net sales of $877 million in Q1 2025, a decrease of 3.7% from $911 million in Q1 2024[72] - The International segment's net sales were $435 million in Q1 2025, compared to $464 million in Q1 2024, indicating a decline of 6.3%[72] Assets and Liabilities - Total assets as of March 31, 2025, were $53,699 million, a slight increase from $53,430 million as of December 31, 2024[16] - The company’s total liabilities were $29,252 million as of March 31, 2025, compared to $29,187 million at the end of 2024[16] - Long-term obligations decreased to $11,927 million as of March 31, 2025, from $12,912 million at the end of 2024, showing a reduction of approximately 7.6%[28] - The current portion of long-term obligations was $1,027 million as of March 31, 2025, slightly up from $1,026 million at the end of 2024[28] - Outstanding obligations under supplier financing arrangements were $1,759 million as of March 31, 2025, compared to $1,740 million as of December 31, 2024[86] Cash Flow and Dividends - Cash and cash equivalents increased to $653 million as of March 31, 2025, up from $510 million at the end of 2024[16] - The company reported a net cash provided by operating activities of $209 million for the first quarter of 2025, compared to $85 million in the first quarter of 2024[17] - Net cash provided by financing activities was $(7) million in Q1 2025, compared to $158 million in Q1 2024, indicating a significant decrease[19] - Cash dividends paid increased to $312 million in Q1 2025 from $299 million in Q1 2024, reflecting a rise of approximately 4.3%[19] - The company declared cash dividends of $312 million in the first quarter of 2025, slightly up from $299 million in the same period last year[19] Investments and Acquisitions - The company entered into a definitive agreement to acquire a controlling interest in GHOST for $999 million, with an initial purchase of a 60% stake completed on December 31, 2024[40] - As of March 31, 2025, investments in unconsolidated affiliates totaled $1,568 million, up from $1,543 million as of December 31, 2024, with Nutrabolt being the largest investment at $1,120 million[79] Tax and Compliance - The effective tax rate for the first quarter of 2025 was 21.7%, a decrease from 23.6% in the same quarter of 2024, primarily due to a non-cash revaluation of state deferred tax liabilities[80] - The company maintained compliance with its minimum interest coverage ratio of 3.25 to 1.00 under the 2025 Revolving Credit Agreement as of March 31, 2025[35] Restructuring and Litigation - The restructuring program initiated in March 2024 is expected to incur pre-tax charges between $125 million and $145 million through the second half of 2025[93] - The company plans to continue its restructuring efforts, including the closure of the Windsor, Virginia manufacturing facility, expected to be completed in the second quarter of 2025[92] - Litigation reserves remained at $2 million as of both March 31, 2025, and December 31, 2024, with ongoing antitrust litigation claims exceeding $5 billion[87][90] - Keurig reached a settlement agreement for $31 million in the Multidistrict Antitrust Litigation, resolving claims from indirect purchasers[89] Stock and Compensation - Stock-based compensation expense for Q1 2025 was $22 million, down from $28 million in Q1 2024[74] - As of March 31, 2025, the company had 12,522,161 outstanding Restricted Share Units (RSUs) with an intrinsic value of $429 million[75] - The company recognized $205 million of unrecognized compensation cost related to unvested RSUs, expected to be recognized over a weighted average period of 3.3 years[76] - The company granted 443,933 Performance Share Units (PSUs) with a fair value of $30.71, resulting in a balance of 442,619 PSUs as of March 31, 2025[78]

Core Viewpoint - Keurig Dr Pepper has appointed two new independent directors, Mike Van de Ven and Lawson Whiting, and Bob Gamgort has transitioned to the role of non-executive Chairman of the Board, effective April 24, 2025 [1][2]. Group 1: Board Changes - The appointments of Mike Van de Ven and Lawson Whiting are aimed at strengthening the Board of Directors with their extensive experience in business management and brand leadership [2]. - Bob Gamgort's transition from Executive Chairman to non-executive Chairman reflects the company's evolution and strategic direction [2]. Group 2: Profiles of New Directors - Mike Van de Ven has 32 years of experience at Southwest Airlines, including roles as President and Chief Operating Officer, and he holds a Bachelor of Business Administration in Accounting [2][3]. - Lawson Whiting has over 25 years at Brown-Forman Corporation, serving as President and CEO since January 2019, and he holds degrees in Finance and Business Administration [3]. Group 3: Company Overview - Keurig Dr Pepper is a leading North American beverage company with over 125 brands and annual revenue exceeding $15 billion, holding leadership positions in various beverage categories [5].

EXHIBIT 99.1 Company Reaffirms 2025 Constant Currency Net Sales and Adjusted EPS Outlook BURLINGTON, MA and FRISCO, TX (April 24, 2025) – Keurig Dr Pepper Inc. (NASDAQ: KDP) today reported results for the first quarter of 2025 and reaffirmed its full year guidance. | | Reported GAAP Basis | 1 Adjusted Basis | | --- | --- | --- | | | Q1 | Q1 | | Net Sales | $3.64 bn | $3.64 bn | | % vs prior year | 4.8% | 6.4% | | Diluted EPS | $0.38 | $0.42 | | % vs prior year | 15.2% | 10.5% | Commenting on the results, CE ...