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]