Keurig Dr Pepper beat Wall Street expectations in its fourth quarter despite year-over-year declines in its U.S. coffee business as the company moves ahead with a transition following the acquisition of JDE Peet’s.
Net income was $270 million, or 20 cents per diluted share, versus $517 million, or 38 cents per diluted share, in the year-previous quarter. Adjusted for one-time events, net income was $534 million, or 39 cents per diluted share, versus $568 million, or 42 cents per diluted share, in the year-before period, the company maintained.
An analyst consensus estimate from Zacks Investment Research called for earnings per diluted share of 37 cents and revenues of $3.83 billion.
Net sales were $3.98 billion versus $3.64 billion in the year-prior quarter, KDP pointed out. Operating income was $756 million versus $801 million in the year-earlier period, while adjusted operating income was $838 million versus $847 million.
In the U.S. Coffee segment, net sales declined 2.3% to $857 million from the year-past quarter, the company indicated. Operating income decreased 20.8% to $160 million in the period year over year, while adjusted operating income decreased 21.3% to $199 million. The adjusted operating income decline primarily resulted from the impact of cost pressures, a volume/mix decline and increased marketing, KDP noted, partially offset by net price realization and productivity savings.
In its outlook for the current fiscal year, the company stated that it expects net sales of $25.9 billion to $26.4 billion and constant currency adjusted diluted EPS growth in a low-double-digit range. The guidance consists of 4% to 6% constant currency net sales growth and 4% to 6% constant currency adjusted diluted EPS growth for KDP’s legacy business, as well as an incremental contribution from the JDE Peet’s acquisition.
In commenting on the results, KDP CEO Tim Cofer said, “The year is off to a good start. We delivered a solid first quarter, with strong momentum in our cold beverage portfolio and coffee results that tracked with our expectations, even as we navigated elevated costs. Earlier this month, we also completed our acquisition of JDE Peet’s, achieving a significant milestone in our transformation agenda and uniting our complementary organizations under a shared vision for global coffee leadership. With well-constructed plans in place, high-quality execution and improving cost visibility as the year unfolds, we remain confident in our ability to deliver on our commitments while standing up two pure-play companies positioned for success.”
