On July 25, 2024, Keurig Dr Pepper Inc (KDP, Financial) released its 8-K filing for the second quarter of 2024, reporting a solid performance that aligns with analyst expectations. The company, formed in 2018 through the merger of Keurig Green Mountain Coffee and Dr Pepper Snapple, continues to lead in the beverage industry with a diverse portfolio of coffee systems and ready-to-drink beverages.
Q2 2024 Financial Highlights
For the second quarter of 2024, Keurig Dr Pepper Inc (KDP, Financial) reported net sales of $3.92 billion, a 3.5% increase compared to the same period last year. This performance was driven by double-digit growth in international markets and solid performance in U.S. refreshment beverages.
| Metric | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| Net Sales | $3.92 billion | $3.79 billion | 3.5% |
| Diluted EPS (GAAP) | $0.38 | $0.36 | 5.6% |
| Adjusted Diluted EPS | $0.45 | $0.42 | 7.1% |
Segment Performance
U.S. Refreshment Beverages: Net sales increased by 3.3% to $2.4 billion, driven by a 2.9% increase in net price realization and a 0.4% growth in volume/mix. This segment benefited from recent partnerships and market traction from new innovations.
U.S. Coffee: Net sales decreased by 2.1% to $1.0 billion, with a 0.8% growth in volume/mix offset by a 2.9% decline in net price. K-Cup® Pod shipments saw a slight increase of 0.2%, reflecting strong market share trends.
International: Net sales surged by 15.5% to $0.6 billion, driven by a 10.4% growth in volume/mix and a 5.1% increase in net price realization. This segment showed broad-based strength across the portfolio.
Financial Achievements and Metrics
Keurig Dr Pepper Inc (KDP, Financial) reported a GAAP operating income increase of 12.0% to $861 million, while adjusted operating income rose by 11.0% to $970 million, representing 24.7% of net sales. GAAP net income increased by 2.4% to $515 million, or $0.38 per diluted share, and adjusted net income rose by 3.2% to $618 million, with adjusted diluted EPS up by 7.1% to $0.45.
Operating cash flow for the quarter was $657 million, and free cash flow totaled $543 million, highlighting the company's strong cash generation capabilities.
CEO Commentary
"Our second quarter results were healthy, with accelerating net sales trends, significant margin expansion, and solid EPS growth. Strong execution drove our performance, as we continued to advance our long-term strategic agenda. Our consumer-centric innovation model is resonating in market, our portfolio expansion to higher growth categories is ongoing, and we are actively enhancing an already robust route-to-market — all underpinned by an unrelenting focus on cost efficiency and capital discipline. Now halfway through 2024, we are on track to achieve our unchanged full year outlook, while also seeding initiatives to fuel consistent growth over multiple years." - CEO Tim Cofer
Analysis and Outlook
Keurig Dr Pepper Inc (KDP, Financial) has demonstrated resilience and growth in a competitive market, driven by strategic initiatives and strong execution. The company's reaffirmation of its fiscal 2024 guidance for mid-single-digit net sales growth and high-single-digit adjusted EPS growth indicates confidence in its ongoing strategies and market position.
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Explore the complete 8-K earnings release (here) from Keurig Dr Pepper Inc for further details.
