Keurig Dr Pepper Q4 Earnings Top Estimates, Coffee Segment Sales Down

Keurig Dr Pepper Inc. KDP posted fourth-quarter 2024 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. Both top and bottom lines also improved year over year.Adjusted earnings per share (EPS) of 58 cents grew 5.5% year over year and outpaced the Zacks Consensus Estimate of 57 cents. The bottom-line improvement was driven by strong growth in adjusted operating income and a reduced share count.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Quarterly results reflected higher net sales and optimism about improvements in volume/mix performance. The company is making significant progress on its multi-year strategic agenda. The results were also fueled by strength in the International and U.S. Refreshment Beverages segments.This Zacks Rank #3 (Hold) company’s shares have gained 4.5% in the past three months compared with the industry’s 3.9% growth.KDP’s Quarterly PerformanceNet sales of $4.07 billion increased 5.2% year over year on a reported basis and came slightly ahead of the Zacks Consensus Estimate of $4.03 billion. On a constant-currency basis, net sales improved 6.2%, backed by a 5.3% increase in volume/mix and a favorable net price realization of 0.9%.Keurig Dr Pepper, Inc Price, Consensus and EPS Surprise Keurig Dr Pepper, Inc price-consensus-eps-surprise-chart | Keurig Dr Pepper, Inc QuoteThe adjusted gross profit rose 3.2% year over year to $2.29 billion, while the adjusted gross margin fell 120 basis points (bps) to 56.3%.The adjusted operating income rose 3.4% year over year to $1.13 billion due to higher sales and productivity savings, partly negated by the impacts of inflation and elevated selling, general and administrative costs consisting of higher marketing investments. Meanwhile, the adjusted operating margin contracted 80 bps year over year to 27.7%.A Look at KDP’s Segmental DetailsSales in the U.S. Refreshment Beverages segment totaled $2.44 billion, up 10.3% year over year, reflecting 2.8% higher net price realization and 7.5% growth in volume/mix. The volume/mix improvement can be attributed to continued strength in the base business, mainly led by CSDs and contributions from Electrolit. The Zacks Consensus Estimate for the U.S. Refreshment Beverages segment was pegged at $2.37 billion for the fourth quarter of 2024.Sales in the U.S. Coffee segment dipped 2.4% year over year to $1.13 billion, reflecting volume/mix improvement of 0.7%, somewhat offset by unfavorable net price realization of 3.1%. The company witnessed a 1.1% year-over-year rise in K-Cup pod shipments. Brewer shipments totaled 10.4 million in the 12 months ending Dec. 31, 2024, up 7.3% year over year, driven by strength in KDP's market share and stabilizing trends in the coffeemaker category. The Zacks Consensus Estimate for the U.S. Coffee segment’s sales was pegged at $1.14 billion.Sales in the International segment gained 0.8% year over year to $499 million. On a constant-currency basis, the segment’s net sales increased 8.5%, gaining from a favorable net price realization of 2% and a volume/mix rise of 6.5%. The Zacks Consensus Estimate for the International segment’s sales was $515 million for the fourth quarter.KPD’s Financial HealthAs of Dec. 31, 2024, Keurig Dr Pepper’s cash and cash equivalents were $510 million. KDP had long-term obligations of $12.9 billion and total stockholders’ equity of $24.2 billion.Net cash provided by operating activities totaled $2.22 billion for 2024, with the free cash flow amounting to $1.66 billion.KDP’s OutlookFor 2025, management projects net sales increase in the mid-single-digit range and adjusted EPS growth to be in the high-single-digit range on a constant currency basis. This includes the expected contribution from the GHOST acquisition.At current rates, foreign currency translation is likely to be nearly a one-two percentage point headwind to top and bottom-line growth in the current year.Three Stocks Looking GoodThe Chef's Warehouse CHEF, which is a distributor of specialty food products in the United States, currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.CHEF has a trailing four-quarter earnings surprise of 34%, on average.The Zacks Consensus Estimate for CHEF’s current financial-year sales and EPS indicates growth of 5.7% and 17.7%, respectively, from the year-ago numbers.Post Holdings POST, which is consumer-packaged goods holding company, has a Zacks Rank of 2 at present. POST has a trailing four-quarter average earnings surprise of 22.3%.The Zacks Consensus Estimate for Post Holdings’ current financial-year sales and EPS implies growth of 0.3% and 2.2%, respectively, from the year-ago numbers.Utz Brands UTZ, which has a diverse portfolio of salty snacks, currently carries a Zacks Rank of 2. UTZ has a trailing four-quarter earnings surprise of 8.8%, on average.The Zacks Consensus Estimate for Utz Brands’ current financial-year sales and EPS indicates growth of 2% and 9.1%, respectively, from the year-ago number.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Chefs' Warehouse, Inc. (CHEF): Free Stock Analysis Report Post Holdings, Inc. (POST): Free Stock Analysis Report Keurig Dr Pepper, Inc (KDP): Free Stock Analysis Report Utz Brands, Inc. (UTZ): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks