Keurig Dr Pepper’s sales surge includes 2.6 billion dollars from JDE Peet’s
Keurig Dr Pepper increased quarterly revenue by 70.6 per cent after adding JDE Peet’s to its business. Growth in the company’s existing operations was smaller, at 8.6 per cent. US beverages and coffee both expanded, while acquisition expenses and a tariff refund affected profitability. The drinks group maintained its annual outlook as it prepared for a planned separation. The acquired business contributed 2.6 billion dollars.
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JDE Peet’s changes the sales comparison
Beverage and coffee group Keurig Dr Pepper reported third-quarter revenue of 7.34 billion dollars, an increase of 70.6 per cent from a year earlier. The business included JDE Peet’s, the coffee operation acquired on 1 April. That purchase added 2.6 billion dollars of quarterly sales that had no counterpart in the previous year’s group revenue.[1]
Existing Keurig Dr Pepper operations also grew. With JDE Peet’s excluded, their net sales increased 8.6 per cent: volume and product mix contributed 6.5 per cent, while net pricing added 2.1 per cent. The group maintained its annual guidance. Zacks’ assessment of the same earnings announcement put adjusted profit above its consensus estimate, but net sales below expectations.[1], [2]
US beverages outpace coffee sales
US refreshment beverage sales reached 3.0 billion dollars, up 10.9 per cent, with higher volumes and better pricing both contributing. US coffee revenue rose 2.7 per cent to 1.0 billion dollars. Coffee volumes and mix improved, although weaker net pricing offset part of that increase. The acquired JDE Peet’s operation reported an adjusted operating margin of 18.1 per cent.[1]
Acquisition costs and a tariff refund affect profit
Operating income under generally accepted accounting principles rose 34.0 per cent to 1.3 billion dollars. Acquisition and integration expenses affected the comparison. Adjusted operating income, which excludes those items, increased 52.5 per cent to 1.7 billion dollars, equivalent to 22.7 per cent of sales. A tariff refund contributed 99 million dollars to both operating-profit measures during the quarter.[1]
Net income attributable to common shareholders was 810 million dollars, or 0.59 dollars per diluted share; adjusted diluted earnings were 0.66 dollars. Operating activities generated 1.04 billion dollars in cash and free cash flow totaled 1.01 billion dollars. Management said investment in brands and operating capabilities continued ahead of the planned division into two companies.[1]
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