NEW YORK - Keurig Dr Pepper Inc. (NASDAQ: NASDAQ:KDP) shares rose 2.8% as the company reported first-quarter earnings beat on Thursday.
The beverage giant posted adjusted earnings per share (EPS) of $0.38, exceeding Wall Street's expectations by $0.03. Revenue for the quarter also surpassed analyst projections, coming in at $3.47 billion against the estimated $3.41 billion.
The company's net sales saw a 3.4% increase from the same quarter last year, indicating a steady growth trajectory. This rise was primarily driven by a 3.1% net price realization, although partially offset by a 0.3% decline in volume/mix. Adjusted operating income grew by a robust 17.5% to $825 million, representing 23.8% of net sales, thanks to gross profit growth and margin expansion.
Keurig Dr Pepper's stock movement reflects investor optimism following the earnings report, which highlighted the company's ability to outperform amid market challenges. The positive response was largely attributed to the EPS beat, signaling strong operational performance and efficient cost management.
Chairman and CEO Bob Gamgort expressed confidence in the company's future growth, emphasizing the activation of an evolved strategy under the incoming CEO Tim Cofer's leadership. Cofer noted the strong first-quarter results as a testament to the organization's consistent execution and the health of the business.
In segment performance, U.S. Refreshment Beverages net sales increased by 4.3% to $2.1 billion, while U.S. Coffee saw a 2.1% decrease to $0.9 billion, reflecting targeted price reductions and increased marketing investment. The International segment experienced an 11.8% surge in net sales to $0.5 billion, showcasing momentum across markets.
Despite the overall positive results, GAAP net income for the quarter saw a slight decrease of 2.8% to $454 million, or $0.33 per diluted share, primarily due to items affecting comparability. However, adjusted net income advanced 10.0% to $530 million, with adjusted diluted EPS growing by 11.8%.
Looking ahead, Keurig Dr Pepper reaffirmed its fiscal 2024 guidance, expecting constant currency net sales growth in the mid-single-digit range and adjusted diluted EPS growth in the high-single-digit range. This guidance aligns with the company's long-term financial algorithm and reflects management's confidence in the strategic direction and growth potential.
Cofer remarked on the company's significant growth opportunity and the intention to realize it through their evolved strategy. "We have a unique and competitively advantaged business," he said, underscoring the company's position as a leader in the beverage industry.
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