Home Most Popular Investing Keurig Dr Pepper (KDP) Reports Strong Q3 Earnings and Sales Growth

Keurig Dr Pepper (KDP) Reports Strong Q3 Earnings and Sales Growth

Keurig Dr Pepper (KDP) Reports Strong Q3 Earnings and Sales Growth

Keurig Dr Pepper Inc. (KDP) has released its third-quarter 2023 results, exceeding expectations for both revenue and earnings. The company attributed its success to ongoing brand strength and favorable pricing. Despite a 13.8% decline in KDP’s stock over the past three months, the industry as a whole experienced a 9.2% increase.

Strong Performance in Q3

In Q3, KDP reported adjusted earnings per share of 48 cents, a 4.3% YoY growth, surpassing the Zacks Consensus Estimate of 47 cents. Net sales reached $3.805 billion, beating the consensus estimate of $3.776 billion and increasing 5.1% from the previous year. The company saw a 5.5% growth in net price realization and a 1.4% decrease in volume/mix. KDP’s performance in the Liquid Refreshment Beverages category remained robust, with retail dollar consumption growing 7% and market share expanding in its cold beverage portfolio.

Segment Performance

In the U.S. Coffee segment, sales declined by 3.2% to $1.012 billion due to lower volume/mix and net price realization. The U.S. Refreshment Beverages segment, on the other hand, experienced a 5.9% increase in sales, driven by higher net price realization and market share gains. The International segment saw a 20.8% YoY sales growth, benefiting from net price realization and volume/mix gains.

Strong Financial Position

As of the end of September 2023, KDP had $260 million in cash and cash equivalents, $9.94 billion in long-term obligations, and a total stockholders’ equity of $25.364 billion. The company generated $1.032 billion in net cash from operating activities and had a free cash flow of $770 million in the first nine months of the year.

Positive Outlook

KDP has reiterated its 2023 outlook, anticipating sales growth of 5-6% and a 6-7% increase in adjusted earnings. The company currently holds a Zacks Rank #3 (Hold).

Solid Staple Bets

Investors looking for promising options can consider Inter Parfums (IPAR), Helen of Troy (HELE), and Ingredion Incorporated (INGR). Inter Parfums, with a Zacks Rank #1 (Strong Buy), shows significant sales growth potential. Helen of Troy, with a Zacks Rank #2 (Buy), has a promising earnings per share growth rate. Ingredion Incorporated, also with a Zacks Rank #2, is expected to experience a rise in earnings per share.

“Keurig Dr Pepper’s strong performance in the third quarter reflects our commitment to delivering consistent growth and value to our shareholders. We are confident in our ability to continue this positive trajectory and achieve our financial targets for the year.”

-John Cahill, CEO of Keurig Dr Pepper