Key facts
- US refreshment beverages volumes rose 7.2% and prices 3.7% from a year earlier in the quarter.
- US coffee segment volumes rose 6.9%, after a 4% decline a year earlier.
- Quarterly gross margin fell to 48% from 54.3%, partly cushioned by a $99 million tariff refund benefit.
- Keurig Dr Pepper reaffirmed annual net sales guidance of roughly $8.3 billion to $8.4 billion.
- The coffee business is set to become a publicly traded company early next year, the company said.
Keurig Dr Pepper beat Wall Street estimates for third-quarter profit and sales on November 3, helped by steady demand for its higher-priced energy and carbonated soft drinks in the US, Reuters reported.
The company posted adjusted profit of 66 cents per share, against analysts' estimates of 62 cents per share compiled by LSEG. Quarterly sales rose 70.6% to $7.34 billion from a year earlier, while analysts had expected a rise of 70.2% to $7.33 billion.
Volumes in the domestic refreshment beverages segment, the company's biggest revenue generator, rose 7.2% for the quarter and prices were up 3.7% from a year earlier. The US coffee segment saw volume growth of 6.9%, after a 4% decline a year earlier.
CEO Tim Cofer said in the statement that the refreshment beverages portfolio maintained its double-digit sales growth momentum and that the company drove solid results in coffee, led by strong JDE Peet's profitability.
Quarterly gross margin came in at 48%, compared with 54.3% a year earlier, reflecting inflationary pressures and higher expenses such as marketing. The impact was partly cushioned by a $99 million benefit from tariff refunds.
Keurig closed its $18 billion acquisition of Dutch coffee and tea maker JDE Peet's in April and named former Kimberly-Clark executive Russ Torres to lead the coffee business, which is set to become a publicly traded company early next year. The company reaffirmed its annual forecast for the third time this fiscal year, noting it includes roughly $8.3 billion to $8.4 billion in net sales and a 7 to 8 percentage point earnings-per-share growth contribution from the JDE Peet's acquisition.
Several consumer-facing companies, particularly food and household brands, have warned of further price hikes next year to offset rising costs linked to the US conflict with Iran, Reuters reported.