Coffee Service

Keurig Dr Pepper reports strong Q4 and FY 2021

Image provided by iStock.

February 24, 2022

Keurig Dr Pepper boosted its Q4 and FY 2021 results, driven by growth in packaged beverages and beverage concentrates, according to an earnings report. Highlights include:

• Net sales for the fourth quarter of 2021 increased 8.7% from $3.12 billion in Q4 2020 to $3.39 billion in Q4 2021, primarily reflecting exceptionally strong growth in packaged beverages, along with strong growth in beverage concentrates and Latin America beverages. On a constant currency basis, net sales advanced 8.5%, reflecting higher volume/mix of 4.4% and favorable net price realization of 4.1%. On a two-year basis, constant currency net sales advanced 15.7% versus 2019.
• Net income rose from $428 million to $843 million in the comparative quarters, while earnings per share on both a basic and diluted basis rose from 30 cents to 59 cents.
• Adjusted net income advanced 15.5% from $554 million to $640 million in the comparative quarters. Adjusted diluted EPS increased 15.4% from 39 cents to 45 cents.
• KDP in-market performance in the liquid refreshment beverage category remained strong in the quarter, with retail dollar consumption advancing 12.6% across the company's cold beverage retail base, largely reflecting strength in carbonated sodas, unflavored water, coconut water, apple juice and apple sauce. This performance was driven by Dr Pepper, Sunkist, Canada Dry, A&W and Squirt carbonated sodas, Core Hydration and Evian water, Vita Coco, Polar seltzers and Mott's.
• In coffee, retail dollar consumption of single-serve pods manufactured by KDP in IRi tracked channels increased 3.4%, driven by growth in partner brands and KDP owned and licensed brands, partially offset by a decline in private label pods manufactured by KDP. Performance in the away-from-home business improved versus the year-ago shelter-in-place environment, although the increase in overall consumer mobility has not yet fully translated into a broad return to offices.
• Coffee system net sales for the fourth quarter of 2021 totaled $1.32 billion, essentially even with the year-ago period.
• Packaged beverage net sales for the fourth quarter of 2021 increased 17.1% to $1.53 billion, compared to $1.31 billion in the year-ago period.
• Packaged beverage net sales for the fourth quarter of 2021 increased 9.2% to $391 million, compared to $358 million in the year-ago period.
• For the full year, net sales rose 9.2% from $11.62 billion in 2020 to $12.68 billion in 2021, driven by strong growth in each business segment.
• KDP in-market performance in the liquid refreshment beverages category remained strong for the year, with retail dollar consumption advancing 8.4% versus prior year across the company's cold beverage retail base, largely reflecting strength in carbonated sodas, unflavored water, coconut water, apple juice and apple sauce.
• In coffee, retail dollar consumption of single-serve pods manufactured by KDP in IRi tracked channels grew 2.7% versus prior year and KDP manufactured share remained strong, advancing to 83.2% for the year.
• GAAP net income for the full year of 2021 advanced 62% to $2.15 billion, or $1.50 per diluted share, compared to $1.33 billion, or 93 cents per diluted share, in the year-ago period.
• Adjusted net income for the full year of 2021 increased 14.7% to $2.28 billion, compared to $1.99 billion in the prior year. Adjusted diluted EPS for the year increased 14.3% to $1.60, compared to $1.40 in the prior year.

Shares traded at $36.55 today against a 52-week range of $30.28-$39.35.

The $3.39 billion in quarterly revenue beat analyst expectations by $90 million while the non-GAAP EPS of 45 cents was in line with expectations, according to Seeking Alpha.

The company affirmed guidance for both net sales and adjusted diluted EPS growth in 2022 in the mid-single-digit range. The company expects EPS performance to strengthen throughout the year, with adjusted diluted EPS growth reaching the high-single-digit range in the second half of 2022.