The second quarter generated solid results for Keurig Dr Pepper as it continued focusing on enhancing operations and reaffirmed its guidance for the fiscal year.
Net income increased to $547 million, or 40 cents per diluted share, from $515 million, or 38 cents per diluted share, in the year-previous quarter, the company reported. Adjusted net income increased to $673 million, or 49 cents per diluted share, from $618 million, or 45 cents per diluted share, in the year-before period.
An analyst consensus estimate from Zacks Investment Research called for earnings per adjusted diluted share of 49 cents and revenues of $4.14 billion.
Net sales increased 6.1% to $4.16 billion from $3.92 billion in the year-earlier quarter. On a constant currency basis, net sales advanced 7.2% year over year, driven by volume/mix growth of 5% and favorable net price realization of 2.2%. The acquisition of GHOST, an energy drink producer, contributed four percentage points to volume/mix growth, Keurig Dr Pepper reported.
GAAP operating income increased 4.3% to $898 million versus the year prior quarter, while adjusted operating income increased 7% to $1.03 billion.
In the U.S. Coffee segment, net sales for the second quarter decreased 0.2% to $900 million. A volume/mix decline of 3.8% offset a favorable net price realization of 3.6%. The essentially flat net sales result reflected K-Cup pricing actions taken to combat inflation, Keurig Dr Pepper noted, offset by pod and brewer shipment declines. Operating income increased 2.2% to $233 million. Adjusted operating income increased 2% to $299 million.
Keurig Dr Pepper reaffirmed its guidance for constant-currency net sales growth in the mid-single-digit range and adjusted diluted EPS growth in the high-single-digit range.
In announcing the financial results, Keurig Dr Pepper CEO Tim Cofer said, “Our Q2 results cemented a strong first half of the year, as we drove robust performance in U.S. Refreshment Beverages, good growth in International, and sequential progress in U.S. Coffee. Today’s dynamic environment puts a premium on operational excellence, which we are demonstrating while pushing ahead on our multi-year strategic agenda. Though the back half will present new challenges, we are on track to deliver our 2025 outlook and are confident in the long-term value creation ahead.”
