Yahoo Finance Keurig Dr Pepper (KDP) Q1 Earnings Top Estimates, Sales Up Y/Y
Keurig Dr Pepper Inc. KDP has reported first-quarter 2023 results, wherein the top and bottom lines surpassed the Zacks Consensus Estimate. Also, both the metrics improved year over year. Results have gained from continued brand strength and significant pricing.
Shares of KDP have increased 2.2% in the past three months, compared with the industry’s 8.5% rise.
Q1 in Detail
Adjusted earnings of 34 cents per share grew 3% year over year and came above the Zacks Consensus Estimate of 33 cents per share.
Net sales of $3,353 million beat the Zacks Consensus Estimate of $3,297 million. Also, the reported figure jumped 8.9% from the year-ago quarter on a reported basis and on a constant-currency (cc) basis. Net price realization grew 9.9%, with a lower volume/mix of 1%.
Keurig Dr Pepper, Inc Price, Consensus and EPS Surprise
Keurig Dr Pepper, Inc price-consensus-eps-surprise-chart | Keurig Dr Pepper, Inc Quote
In the reported quarter, Keurig Dr Pepper’s in-market performance in the Liquid Refreshment Beverages category remained sturdy, with retail dollar consumption growing 13.6% and market share expanding roughly 88% of KDP's cold beverage portfolio. This mainly reflected strength in CSDs, seltzers, energy, apple juice, coconut waters and fruit drinks. Also, strength in Dr Pepper, Canada Dry, A&W, Sunkist, Squirt and Crush CSDs, Polar seltzers, Vita Coco, C4 Energy, Mott's and Hawaiian Punch aided the results.
The overall at-home coffee category trends have been impacted by higher consumer mobility year over year, with the single serve pod segment expanding volume share of the category. U.S. retail dollar consumption of Manufactured pods dipped 0.5% in IRi tracked channels during the reported quarter, while KDP Manufactured share was healthy at nearly 81%.
Adjusted gross profit rose 8.9% year over year to $1,768 million, while the adjusted gross margin was flat year over year at 52.7%. Adjusted operating income fell 4.5% to $699 million in the quarter. Meanwhile, the adjusted operating margin contracted 290 basis points to 20.9%.
Segmental Details
Sales in the U.S. Coffee segment slipped 1.3% year over year to $931 million, driven by improved net price realization of 5.3%, more than offset by 6.6% lower volume/mix. At-home coffee consumption continued to normalize after the pandemic. Further, pod revenues grew 2.9%, including a shipment drop of 1.9% mainly owing to the greater mobility year over year.
On a trailing twelve-month basis compared to the pre-pandemic first-quarter 2019 period, at-home pod shipments increased 22.8%, reflecting a mid-single digit compound annual growth rate. Brewer shipments totaled 10.2 million in the twelve months ending Mar 31, 2023, representing a 9.8% drop year over year.
Sales in the U.S. Refreshment Beverages segment totaled $2,007 million, up 12.7% year over year, gaining from higher net price realization of 12.5% and a 0.2%-rise in volume/mix. The results were also driven by recent innovations, most particularly Dr Pepper Strawberries & Cream, and effective in-market execution along with the contribution from its sales and distribution partnership for C4 Energy.
Sales in the International segment rose 17.2% year over year to $415 million, gaining from a favorable net price realization of 9% and a volume/mix rise of 7.7%. At cc, the segment’s net sales increased 16.7%. Also, strength in Penafiel and increases in K-Cup Pods in Canada aided results.
Financials
As of Mar 31, 2023, Keurig Dr Pepper’s cash and cash equivalents were $204 million. KDP also had long-term obligations of $9,929 million and a total stockholders’ equity of $25,103 million (excluding non-controlling interest).
Net cash provided by operating activities totaled $71 million in the first quarter of 2023. The Zacks Rank #3 (Hold) company generated a free cash flow of $16 million in the said period.
Outlook
Keurig Dr Pepper reaffirmed its 2023 view. The company continues to expect sales growth of 5% and an adjusted earnings increase of 6-7%. Unfavorable currency is likely to act as a headwind to both the above-mentioned metrics by half of one percentage point each.
Consumer Staple Stocks Worth a Look
Some better-ranked stocks are Inter Parfums IPAR, General Mills GIS and Kimberly-Clark KMB.
IPAR has an expected long-term earnings growth rate of 15% and a trailing four-quarter earnings surprise of 36.2%, on average. Inter Parfums currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Inter Parfums’ current financial year’s sales and earnings suggests growth of 10.5% and 0.8%, respectively, from the year-ago reported numbers.
General Mills is a major designer, marketer and distributor of premium lifestyle products. It currently carries a Zacks Rank #2 (Buy). GIS has a trailing four-quarter earnings surprise of 8.1%, on average.
The Zacks Consensus Estimate for General Mills’ current financial year’s sales and earnings suggests growth of 6.3% and 7.4%, respectively, from the year-ago reported numbers.
Kimberly-Clark is engaged in the manufacturing and marketing of a wide range of consumer products around the world. It currently has a Zacks Rank of 2. KMB has a trailing four-quarter earnings surprise of 1.4%, on average.
The Zacks Consensus Estimate for Kimberly-Clark’s current financial year’s sales and earnings suggests growth of 2% and 5.2%, respectively, from the year-ago reported numbers.
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