Keurig Dr Pepper(US:KDP)2024-10-24 11:03Financial Performance - Q3 2024 net sales increased 2.3% to $3.89 billion, with constant currency growth of 3.1% driven by volume/mix growth of 3.5%[3] - Diluted EPS for Q3 2024 was $0.45, reflecting a 21.6% increase year-over-year, while adjusted diluted EPS rose 6.3% to $0.51[5] - GAAP operating income for Q3 2024 increased 0.7% to $902 million, with adjusted operating income up 7.5% to $1,050 million, representing 27.0% of net sales[4] - Net sales for Q3 2024 reached $3,891 million, a 2.3% increase from $3,805 million in Q3 2023[22] - Gross profit for Q3 2024 was $2,140 million, compared to $2,111 million in Q3 2023, reflecting a gross margin improvement[22] - Net income for the first nine months of 2024 was $1,585 million, up from $1,488 million in the same period of 2023, representing a 6.5% increase[26] - The company’s total net sales for the first nine months of 2024 were $11,281 million, compared to $10,947 million in the same period of 2023, indicating a 3.0% increase[28] - For Q3 2024, reported gross profit was $2,140 million with a gross margin of 55.0%[36] - Adjusted gross profit for Q3 2024 increased to $2,178 million, reflecting a gross margin of 56.0%[36] - Net income for Q3 2024 was $616 million, translating to diluted earnings per share of $0.45[38] - Adjusted net income for Q3 2024 was $694 million, with diluted earnings per share of $0.51[38] - For the first nine months of 2024, reported net income was $1,585 million, with diluted earnings per share of $1.16, reflecting a 23.4% effective tax rate[48] - Adjusted diluted earnings per share for the first nine months of 2024 was $1.34, compared to $1.24 in the same period of 2023[48] Segment Performance - U.S. Refreshment Beverages segment net sales grew 5.3% to $2.4 billion, driven by volume/mix growth of 4.0% and higher net price realization of 1.3%[7] - U.S. Coffee segment net sales decreased 3.6% to $1 billion, with unfavorable net price realization of 6.3% offsetting volume/mix growth of 2.7%[8] - International segment net sales increased 0.4% to $0.5 billion, with constant currency growth of 6.5% driven by volume/mix growth of 3.1%[9] - U.S. Refreshment Beverages segment net sales for Q3 2024 were $2,390 million, up from $2,270 million in Q3 2023, a growth of 5.3%[28] - U.S. Refreshment Beverages segment reported a 4.3% increase in net sales for the first nine months of 2024, while U.S. Coffee segment experienced a decline of 2.6%[52] - The International segment saw a net sales increase of 8.9%, with a constant currency adjusted growth of 9.5% for the first nine months of 2024[52] Cash Flow and Expenses - Operating cash flow for Q3 2024 was $628 million, with free cash flow totaling $503 million[5] - The company incurred interest expense of $106 million in Q3 2024, a decrease from $237 million in Q3 2023, reflecting improved debt management[22] - The company incurred $24 million in restructuring costs related to network optimization in Q3 2024[40] - The company incurred $111 million in productivity-related costs during the first nine months of 2024, impacting adjusted income from operations[50] - Free cash flow for the first nine months of 2024 is $973 million, compared to $770 million for the same period in 2023[61] - The company reported a net cash provided by operating activities of $1,370 million for the first nine months of 2024[61] - The company has made purchases of property, plant, and equipment totaling $398 million during the first nine months of 2024[61] Guidance and Future Outlook - The company reaffirmed its fiscal 2024 guidance for constant currency net sales growth in a mid-single-digit range and adjusted diluted EPS growth in a high-single-digit range[10] - The company anticipates continued growth in the International segment, projecting a 22.3% increase in adjusted income from operations[50] Debt and Liabilities - Total current assets increased to $4,102 million as of September 30, 2024, up from $3,375 million at the end of 2023[24] - Total liabilities rose to $27,749 million as of September 30, 2024, compared to $26,454 million at the end of 2023[24] - Cash and cash equivalents increased significantly to $552 million from $267 million at the end of 2023[24] - Total principal amounts of commercial paper notes and senior unsecured notes are $15,036 million, with cash and cash equivalents of $552 million[56] Operational Efficiency - The company emphasized disciplined overhead expense management and productivity savings as key drivers of adjusted operating income growth[4] - The total operating margin for Q3 2024 improved to 27.0%, up from 25.9% in Q3 2023[43][44] - Adjusted income from operations for the first nine months of 2024 was $2,528 million, representing a 11.3% increase compared to the previous year[50] - Keurig Dr Pepper's adjusted income from operations for the first nine months of 2024 was $2,845 million, with an operating margin of 25.2%[46] - The management leverage ratio stands at 3.2 as of September 30, 2024[56] Other Financial Metrics - Adjusted EBITDA for the last twelve months is $4,560 million, reflecting an increase from $4,251 million[58] - Net income for the last twelve months is $2,278 million, with interest expense at $552 million and provision for income taxes at $689 million[58] - Depreciation expense for the last twelve months is $413 million, with other amortization at $185 million[58] - Items affecting comparability in the adjusted EBITDA include restructuring costs of $24 million and productivity improvements of $154 million[58]