In this photo illustration, cans of Dr. Pepper soda are displayed in San Anselmo, California on June 3, 2024.
Justin Sullivan | Getty Images
Dr. Pepper Quarterly profit and revenue reported Thursday were in line with analysts’ expectations as rising prices boosted U.S. soda sales.
The company’s shares rose 5% in early trading.
The company’s report compared with Wall Street expectations, according to a survey of analysts by London Stock Exchange Group (LSEG):
- Earnings per share: Adjusted 45 cents, in line with expectations
- income: $3.92 billion, in line with expectations
The beverage company reported second-quarter net income of $515 million, or 38 cents a share, up from $503 million, or 36 cents a share, a year earlier.
Excluding items, Keurig Dr Pepper earned 45 cents per share.
net sales grew 3.5% to $3.92 billion. Volume (excluding pricing and currency changes) increased 1.8% in the quarter, while prices increased 1.6% compared with the same period last year.
Sales at Keurig Dr Pepper’s U.S. soft drinks division, which includes Snapple, Canada Dry and Sunkist, grew 3.3%. Its beverage prices increased by 2.9% compared with the same period last year. Its Dr Pepper creamy coconut drink is the company’s most successful limited-time drink.
Dr. Pepper has also recently gone beyond Pepsi The second most consumed soda in the United States, after Coca ColaAccording to Beverage Digest. Its parent company’s larger rivals have seen mixed results in recent quarters. Pepsi’s price increases have led some consumers to switch away from its drinks and snacks, while Coca-Cola’s performance has been boosted by premium products such as Fairlife and strong international demand.
Keurig Dr Pepper executives said on a conference call that while soda sales have remained resilient, sales of non-carbonated beverages and even energy drinks are facing greater pressure due to an “unbalanced” consumer environment.
Sales at Keurig Dr Pepper’s U.S. coffee division fell 2.1% to $1 billion in the quarter due to a 2.9% decrease in pricing. K-Cup pod shipments were roughly flat, which the company attributed to strong market share trends.
The company also tends to market its products by emphasizing that drinking coffee at home is cheaper than buying it from a coffee shop, hoping to attract frugal shoppers. It’s also trying to win over loyal fans of Starbucks and Dunkin’ by introducing cold coffee through K-Cup cold brew coffee pods and other new products.
Keurig Dr Pepper CEO Tim Cofer said on a conference call that while cold drinks account for about three-quarters of Starbucks sales, cold coffee accounts for less than 20% of at-home coffee occasions.
The company’s international unit grew sales 15.5% in the quarter but accounted for less than one-sixth of Keurig Dr Pepper’s revenue.
The company also reiterated its previous full-year guidance of continued currency revenue growth in the mid-single-digit range and adjusted earnings per share growth in the high-single-digit range.
