Coffee Service

Keurig Dr Pepper lifts Q2 2022 sales, earnings decline

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July 28, 2022

Keurig Dr Pepper boosted sales for Q2 2022 over the prior year period while earnings declined, according to an earnings report. Highlights include:

• Net sales increased 13.2% from $3.14 billion in Q2 2021 to $3.55 billion for the quarter ending June 30, 2022, driven by growth in all segments with both pricing and volume rising.
• Net income fell from $448 million to $218 million in the comparative quarters.
• Basic earnings per share fell from 32 cents to 15 cents while diluted EPS fell from 31 cents to 15 cents.
• KDP in-market performance in the liquid refreshment beverages category remained exceptionally strong in the quarter, with retail dollar consumption advancing 9.9% and market share growing or holding across 92% of the company's cold beverage portfolio, largely reflecting strength in carbonated sodas, premium unflavored water, coconut water, seltzers, teas, apple juice, vegetable juice and fruit drinks. This performance was driven by Dr Pepper, Sunkist, Canada Dry, A&W and Squirt CSDs, Core Hydration, Vita Coco, Polar seltzers, Snapple, Hawaiian Punch and Mott's.
• Retail dollar consumption of single-serve coffee pods manufactured by KDP increased 3.8% in IRi tracked channels, led by higher pricing in both partner and KDP owned and licensed brands, with stronger growth registered in untracked channels.
• Coffee systems net sales increased 8.5% to $1.20 billion, compared to $1.10 billion in the year-ago period and, on a constant currency basis, net sales increased 9.1%.
• Packaged beverages net sales increased 12.8% to $1.69 billion compared to $1.5 billion in the year-ago period and, on a constant currency basis, net sales increased 12.9%.
• Beverage concentrates net sales increased 22.7% to $460 million compared to $375 million in the year-ago period and, on a constant currency basis, increased 22.9%.

KDP raised its guidance for 2022 constant currency net sales growth to the low-double-digit range and reaffirmed its guidance for Adjusted EPS growth in the mid-single-digit range. The company continues to expect Adjusted EPS growth in the second half of the year to reach the high-single-digit range, driven largely by the fourth quarter. Shares traded today at $38.24 against a 52-week range of $32.44-$39.35.

The $3.55 billion in quarterly revenue beat analyst expectations by $170 million while the non-GAAP EPS of 39 cents was in line with expectations, according to Seeking Alpha.

"Our strong results reflect the flexibility and resilience of our business and the capability of our team to execute with excellence," Chairman and CEO Bob Gamgort said in the press release. "We successfully recovered from supply chain disruptions in coffee and non-carbonated beverages, implemented additional pricing to offset inflation and continued to accelerate growth across our broad portfolio, leading to another quarter of strong market share performance. We remain confident that our 'all-weather' business model will enable us to deliver in the ongoing volatile macro environment."