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Keurig Dr Pepper (KDP) Q4 Earnings Miss, Sales Beat Estimates
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Keurig Dr Pepper Inc. (KDP - Free Report) has reported fourth-quarter 2022 results, wherein the top line surpassed the Zacks Consensus Estimate, while earnings missed the same. Both metrics improved year over year. Results have gained from continued brand strength and significant pricing.
Shares of KDP have lost 6.6% in the past three months compared with the industry’s 2% decline.
Q4 in Detail
Adjusted earnings of 50 cents per share grew 11.1% year over year but lagged the Zacks Consensus Estimate of 51 cents.
Image Source: Zacks Investment Research
Net sales of $3,803 million beat the Zacks Consensus Estimate of $3,795 million. Also, the reported figure jumped 12.1% from the year-ago quarter and 12.4% on a constant-currency basis (cc). The upside was driven by double-digit growth across all four segments. Net price realization grew 13.1%, with a lower volume/mix of 0.7%.
In the reported quarter, Keurig Dr Pepper’s in-market performance in the Liquid Refreshment Beverages category remained sturdy, with retail dollar consumption growing 12.2% and market share expanding above 92% of KDP's cold beverage portfolio. This mainly reflected strength in CSDs, premium unflavored water, seltzers, teas, apple juice and fruit drinks.
Also, strength in CORE Hydration, Evian, Polar seltzers, Mott's, Hawaiian Punch and Dr Pepper, Crush, Canada Dry, A&W, Schweppes and Squirt CSDs aided the results.
In coffee, the retail dollar consumption of single-serve pods manufactured by Keurig Dr Pepper rose 7.1% in channels tracked by Iri, driven by higher pricing in partner and KDP-owned and licensed brands. Also, KDP’s manufactured share was solid at 83%, driven by the strength of owned and licensed pods.
Adjusted gross profit rose 10.4% year over year to $2,015 million, while the adjusted gross margin contracted 80 basis points (bps) to 53%. Adjusted operating income rose 12.9% to $1,027 million in the quarter. Meanwhile, the adjusted operating margin contracted 20 bps to 27%.
Segmental Details
Sales in the Coffee Systems segment rose 12.7% year over year to $1,485 million, driven by the coffee recovery program. At cc, net sales increased 13.8%. Net price realization grew 10.6%, driven by pricing actions undertaken in late 2021 and the second quarter of 2022, partly offset by a higher volume/mix of 3.2%. The volume/mix increase was driven by pod shipment growth of 2.9%, which offset brewer shipment growth of 3.3%.
Sales in the Packaged Beverages segment totaled $1,682 million, up 9.9% year over year and 10.1% on a cc basis, gaining from higher net price realization of 14.9%, somewhat offset by volume/mix decline of 4.8% year over year. The segment benefited from growth in CSDs, Mott's, Snapple, Hawaiian Punch, Evian and Polar seltzers.
Sales in the Beverage Concentrates segment rose 14.3% year over year to $447 million, gaining from a favorable net price realization of 14.3% and a volume/mix rise of 0.5%. At cc, the segment’s net sales increased 14.8%. The total shipment volume grew 1.2% year over year on increases in Dr Pepper and Schweppes.
The Latin America Beverages segment’s sales advanced 24.3% on a reported and 17.8% on a cc basis to $189 million. This was mainly caused by volume/mix growth of 4.6% and an improved net price realization of 13.2%. Strength in Peñafiel and Clamato, as well as continued strong in-market execution, bodes well.
Financials
As of Dec 31, 2022, Keurig Dr Pepper’s cash and cash equivalents were $535 million. KDP also had long-term obligations of $11,072 million and a total stockholders’ equity of $25,126 million (excluding non-controlling interest).
Net cash provided by operating activities totaled $2,837 million in 2022. The Zacks Rank #3 (Hold) company generated a free cash flow of $2,652 million in the said period.
Keurig Dr Pepper, Inc Price, Consensus and EPS Surprise
Keurig Dr Pepper issued its 2023 view. The company expects sales growth of 5% and adjusted earnings increase of 6-7%. Unfavorable currency is likely to act as a headwind to both above-mentioned metrics by half of one percentage point each.
Conagra, a consumer-packaged goods food company, currently sports a Zacks Rank #1 (Strong Buy). CAG has a trailing four-quarter earnings surprise of 8.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Conagra’s current-year sales and earnings suggests growth of 6.8% and 11.9%, respectively, from the year-ago reported figures.
Lamb Weston, which is a frozen potato product company, currently sports a Zacks Rank of 1. LW has a trailing four-quarter earnings surprise of 52.6%, on average.
The Zacks Consensus Estimate for Lamb Weston’s current-year sales and EPS suggests increases of 19.5% and 89.9%, respectively, from the year-ago reported numbers.
Post Holdings, which operates as a consumer-packaged goods company, currently sports a Zacks Rank of 1. POST has a trailing four-quarter earnings surprise of 9.6%, on average.
The Zacks Consensus Estimate for Post Holdings’ current-year EPS suggests an increase of 70.8% from the year-ago reported number.
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Keurig Dr Pepper (KDP) Q4 Earnings Miss, Sales Beat Estimates
Keurig Dr Pepper Inc. (KDP - Free Report) has reported fourth-quarter 2022 results, wherein the top line surpassed the Zacks Consensus Estimate, while earnings missed the same. Both metrics improved year over year. Results have gained from continued brand strength and significant pricing.
Shares of KDP have lost 6.6% in the past three months compared with the industry’s 2% decline.
Q4 in Detail
Adjusted earnings of 50 cents per share grew 11.1% year over year but lagged the Zacks Consensus Estimate of 51 cents.
Image Source: Zacks Investment Research
Net sales of $3,803 million beat the Zacks Consensus Estimate of $3,795 million. Also, the reported figure jumped 12.1% from the year-ago quarter and 12.4% on a constant-currency basis (cc). The upside was driven by double-digit growth across all four segments. Net price realization grew 13.1%, with a lower volume/mix of 0.7%.
In the reported quarter, Keurig Dr Pepper’s in-market performance in the Liquid Refreshment Beverages category remained sturdy, with retail dollar consumption growing 12.2% and market share expanding above 92% of KDP's cold beverage portfolio. This mainly reflected strength in CSDs, premium unflavored water, seltzers, teas, apple juice and fruit drinks.
Also, strength in CORE Hydration, Evian, Polar seltzers, Mott's, Hawaiian Punch and Dr Pepper, Crush, Canada Dry, A&W, Schweppes and Squirt CSDs aided the results.
In coffee, the retail dollar consumption of single-serve pods manufactured by Keurig Dr Pepper rose 7.1% in channels tracked by Iri, driven by higher pricing in partner and KDP-owned and licensed brands. Also, KDP’s manufactured share was solid at 83%, driven by the strength of owned and licensed pods.
Adjusted gross profit rose 10.4% year over year to $2,015 million, while the adjusted gross margin contracted 80 basis points (bps) to 53%. Adjusted operating income rose 12.9% to $1,027 million in the quarter. Meanwhile, the adjusted operating margin contracted 20 bps to 27%.
Segmental Details
Sales in the Coffee Systems segment rose 12.7% year over year to $1,485 million, driven by the coffee recovery program. At cc, net sales increased 13.8%. Net price realization grew 10.6%, driven by pricing actions undertaken in late 2021 and the second quarter of 2022, partly offset by a higher volume/mix of 3.2%. The volume/mix increase was driven by pod shipment growth of 2.9%, which offset brewer shipment growth of 3.3%.
Sales in the Packaged Beverages segment totaled $1,682 million, up 9.9% year over year and 10.1% on a cc basis, gaining from higher net price realization of 14.9%, somewhat offset by volume/mix decline of 4.8% year over year. The segment benefited from growth in CSDs, Mott's, Snapple, Hawaiian Punch, Evian and Polar seltzers.
Sales in the Beverage Concentrates segment rose 14.3% year over year to $447 million, gaining from a favorable net price realization of 14.3% and a volume/mix rise of 0.5%. At cc, the segment’s net sales increased 14.8%. The total shipment volume grew 1.2% year over year on increases in Dr Pepper and Schweppes.
The Latin America Beverages segment’s sales advanced 24.3% on a reported and 17.8% on a cc basis to $189 million. This was mainly caused by volume/mix growth of 4.6% and an improved net price realization of 13.2%. Strength in Peñafiel and Clamato, as well as continued strong in-market execution, bodes well.
Financials
As of Dec 31, 2022, Keurig Dr Pepper’s cash and cash equivalents were $535 million. KDP also had long-term obligations of $11,072 million and a total stockholders’ equity of $25,126 million (excluding non-controlling interest).
Net cash provided by operating activities totaled $2,837 million in 2022. The Zacks Rank #3 (Hold) company generated a free cash flow of $2,652 million in the said period.
Keurig Dr Pepper, Inc Price, Consensus and EPS Surprise
Keurig Dr Pepper, Inc price-consensus-eps-surprise-chart | Keurig Dr Pepper, Inc Quote
Outlook
Keurig Dr Pepper issued its 2023 view. The company expects sales growth of 5% and adjusted earnings increase of 6-7%. Unfavorable currency is likely to act as a headwind to both above-mentioned metrics by half of one percentage point each.
Consumer Staple Stocks Worth a Look
Some better-ranked consumer staple stocks are Conagra Brands (CAG - Free Report) , Lamb Weston (LW - Free Report) and Post Holdings (POST - Free Report) .
Conagra, a consumer-packaged goods food company, currently sports a Zacks Rank #1 (Strong Buy). CAG has a trailing four-quarter earnings surprise of 8.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Conagra’s current-year sales and earnings suggests growth of 6.8% and 11.9%, respectively, from the year-ago reported figures.
Lamb Weston, which is a frozen potato product company, currently sports a Zacks Rank of 1. LW has a trailing four-quarter earnings surprise of 52.6%, on average.
The Zacks Consensus Estimate for Lamb Weston’s current-year sales and EPS suggests increases of 19.5% and 89.9%, respectively, from the year-ago reported numbers.
Post Holdings, which operates as a consumer-packaged goods company, currently sports a Zacks Rank of 1. POST has a trailing four-quarter earnings surprise of 9.6%, on average.
The Zacks Consensus Estimate for Post Holdings’ current-year EPS suggests an increase of 70.8% from the year-ago reported number.