Coffee Service

Keurig Dr Pepper boosts sales, earnings for Q1 2021

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April 29, 2021

Keurig Dr Pepper Inc.'s net sales for the first quarter of 2021 ending March 31, 2021 increased 11.1% to $2.90 billion, compared to $2.61 billion in the year ago period, driven by strong growth in each business segment, particularly coffee systems, according to an earnngs report.

GAAP diluted earnings per share more than doubled to 23 cents and adjusted diluted EPS grew to 33 cents, a double-digit increase versus last year.

The $2.9 billion in revenue beat analyst expectations by $180 million, according to Seeking Alpha, while the non-GAAP EPS of 33 cents beat expectations by 1 cent and the GAAP EPS of 23 cents missed expectations by 6 cents.

Shares traded at $35.41 today against a 52-week range of $24.91-$36.45.

"We delivered an exceptional first quarter, driving double-digit net sales and earnings growth, behind outstanding in-market execution," Chairman and CEO Bob Gamgort said in a prepared statement. "Looking forward, we see an improving, but volatile, macro environment marked by increasing consumer mobility and rising inflationary headwinds. We remain focused on delivering our business plan, with increased net sales growth expectations and growing confidence in achieving our adjusted diluted EPS growth target of 13% to 15% for the year, and we plan to reinvest any earnings upside in the business to drive future growth."

KDP in-market performance in the quarter remained strong, with retail dollar consumption advancing 9.4% across the company's cold beverage retail base, with particular strength in CSDs, premium unflavored water, teas, juice drinks, apple juice, vegetable juice, mixers and coconut water.

This performance reflected the strength of Dr Pepper, Canada Dry, A&W, 7UP and Sunkist CSDs, Core hydration, Snapple teas and fruit drinks, Clamato vegetable juice, Motts apple juice and Vita Coco.

In coffee, retail consumption of single-serve pods manufactured by KDP in IRi tracked channels increased 3.9% in the quarter and dollar market share advanced to 83%.

In untracked channels, accelerated e-commerce growth of K-Cup pods continued in the quarter, more than offsetting declines in the away-from-home office and hospitality businesses.

Net sales for coffee systems the first quarter of 2021 advanced 17.4% to $1.14 billion, compared to $970 million in the year ago period.

The pod volume growth was driven by strong at-home consumption, partially offset by continued softness in the away-from-home business, as return to offices and hospitality has been slow.

The brewer volume growth largely reflected strong retail consumption, primarily driven by the company's successful brewer innovation program, as well as a benefit from shipment timing.

Net sales for packaged beverages in the first quarter of 2021 increased 7.4% to $1.31 billion, compared to $1.22 billion in the year ago period.

Leading the net sales performance were Dr Pepper, A&W, Canada Dry, Sunkist, 7UP and Squirt CSDs, as well as growth of Snapple and Clamato, partially offset by a decline in Bai.

Net sales for beverage concentrates the first quarter of 2021 increased 7.2% to $328 million, compared to $306 million in the year ago period.

Total shipment volume for beverage concentrates versus year-ago increased 1.0% in the quarter, as increases in Dr Pepper and A&W were partially offset by lower shipment volume in Canada Dry and Sunkist. Bottler case sales volume decreased 3.1% in the quarter compared to the year-ago period.

The company reaffirmed its guidance for adjusted diluted EPS growth in the range of 13% to 15%, reflecting its increased guidance for constant currency net sales growth in the range of 4% to 6%, which is expected to offset growing inflationary pressures in the balance of the year.