Keurig Q1 Earnings & Sales Beat, U.S. Refreshing Beverages Up 11%

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]