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KDP Q3 Earnings Meet Estimates, 2025 Sales Outlook Raised, Stock Up 8%
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Key Takeaways
Keurig posted Q3 sales of $4.31B, up 10.7% year over year and beat consensus estimates.
Strong U.S. Refreshment Beverages growth and steady U.S. Coffee gains drove market share up.
KDP raised its 2025 net sales outlook to high-single-digit growth while keeping EPS guidance unchanged.
Keurig Dr Pepper Inc. (KDP - Free Report) reported third-quarter 2025 results, wherein both the top and bottom lines improved year over year. Sales beat the Zacks Consensus Estimate and earnings met the same. Reflecting continued business strength and confidence in its strategy, the company raised its 2025 net sales outlook. As a result, shares of KDP gained 7.6% yesterday.
The company’s third-quarter results were highlighted by robust growth in U.S. Refreshment Beverages and steady sequential improvement in U.S. Coffee. Innovation excellence and effective in-market execution drove market share gains across key categories, while sustained sales momentum and disciplined actions to manage inflationary pressures supported solid earnings performance and free cash flow growth.
KDP remains committed to strengthening its core business while strategically preparing for the next phase of transformation — beginning with the acquisition and integration of JDE Peet’s, followed by its planned separation into two leading, pure-play companies.
Keurig Dr Pepper, Inc Price, Consensus and EPS Surprise
Net sales of $4.31 billion increased 10.7% year over year on a reported basis and surpassed the Zacks Consensus Estimate of $4.14 billion. On a constant currency basis, net sales increased 10.6%, driven by a 6.4% gain in volume/mix and a 4.2% benefit from favorable net pricing. The acquisition of GHOST contributed 4.4 percentage points to the volume/mix growth.
Adjusted earnings per share (EPS) of 54 cents grew 5.9% year over year. The bottom-line improvement was driven by higher adjusted operating income and gains from minority investments.
The adjusted gross profit rose 7.9% year over year to $2.35 billion, while the adjusted gross margin fell 100 basis points (bps) to 55%.
The adjusted operating income rose 3.9% year over year to $1.09 billion, driven by higher net sales and productivity savings, partially offset by inflationary pressures. Meanwhile, the adjusted operating margin declined 170 basis points year over year to 25.3% in the quarter under review.
A Look at KDP's Segmental Details
Net sales in the U.S. Refreshment Beverages segment increased 14.4% year over year to $2.73 billion, driven by an 11.2% rise in volume/mix and a 3.2% benefit from favorable net pricing. The Zacks Consensus Estimate for sales of this segment was pegged at $2.61 billion for the quarter under review. Segment growth was supported by market share gains in carbonated soft drinks, energy drinks and sports hydration. The acquisition of GHOST contributed 7.2 percentage points to the volume/mix growth.
Adjusted operating income rose 10% year over year to $816 million, representing 29.8% of net sales. This growth was driven by higher net sales and productivity savings, partially offset by inflationary pressures.
Net sales in the U.S. Coffee segment increased 1.5% year over year to $991 million, reflecting a 5.5% benefit from favorable net pricing, partially offset by a 4% decline in volume/mix. The consensus estimate for sales of this segment was pegged at $969.3 billion for the quarter under review. The increase in net sales was primarily driven by K-Cup pricing actions to offset inflation, while lower pod and brewer shipments weighed on performance.
Adjusted operating income rose 2.6% year over year to $317 million, or 32% of net sales. Growth was supported by favorable pricing and cost efficiencies, partially offset by inflationary pressures.
Net sales in the International segment increased 10.5% year over year to $580 million. On a constant currency basis, net sales grew 10.1%, reflecting a 6.1% benefit from favorable net pricing and a 4% increase in volume/mix. The consensus estimate for sales of this segment was pegged at $552.5 billion for the quarter under review. Growth was led by strong performance in key categories, including mineral water in Mexico and single-serve coffee in Canada.
Adjusted operating income declined 4.3% to $155 million, representing 26.7% of net sales. The decrease was primarily due to inflationary pressures, which more than offset the benefits of net sales growth and productivity savings.
KDP Stock Past Three-Month Performance
Image Source: Zacks Investment Research
Financial Health of Keurig
As of Sept. 30, 2025, Keurig’s cash and cash equivalents were $516 million. The company had long-term obligations of $13.5 billion and total stockholders’ equity of $25.3 billion.
Net cash provided by operating activities totaled $639 million in the third quarter of 2025, with the free cash flow amounting to $528 million.
KDP’s 2025 Outlook
KDP raises its full-year net sales outlook and reaffirms EPS guidance for 2025. The company now expects 2025 constant currency net sales growth in the high-single-digit range, up from its prior mid-single-digit growth outlook.
The outlook for adjusted EPS growth remains unchanged in the high-single-digit range. At current exchange rates, foreign currency translation is expected to represent approximately a 0.5 percentage point headwind to both full-year revenue and earnings growth.
Shares of this currently Zacks Rank #4 (Sell) company have lost 13.6% in the past three months against the industry’s 1.1% rise.
Stocks to Consider
We have highlighted three better-ranked stocks from the Consumer Staples sector, namely United Natural Foods, Inc. (UNFI - Free Report) , PepsiCo, Inc. (PEP - Free Report) and Ollie's Bargain Outlet Holdings (OLLI - Free Report) .
United Natural is the leading distributor of natural, organic and specialty food and non-food products, currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
UNFI delivered an earnings surprise of 416.2% in the trailing four quarters, on average. The Zacks Consensus Estimate for United Natural’s current fiscal-year sales and earnings indicates growth of 2.5% and nearly 167.6%, respectively, from the year-ago reported quarter.
PepsiCo is one of the leading global food and beverage companies, currently carrying a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for PepsiCo’s current financial-year sales indicates growth of 1.8%, whereas EPS suggests a decline of 0.6% from the year-ago period’s reported figures. PEP has a trailing four-quarter negative earnings surprise of 1.1%, on average.
Ollie's Bargain Outlet Holdings is a value retailer of brand-name merchandise at drastically reduced prices and currently carries a Zacks Rank #2. OLLI delivered a trailing four-quarter earnings surprise of 4.2%, on average.
The Zacks Consensus Estimate for Ollie's Bargain’s current fiscal-year sales and earnings indicates a rise of around 16.4% and 16.5%, respectively, from the year-earlier levels.
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KDP Q3 Earnings Meet Estimates, 2025 Sales Outlook Raised, Stock Up 8%
Key Takeaways
Keurig Dr Pepper Inc. (KDP - Free Report) reported third-quarter 2025 results, wherein both the top and bottom lines improved year over year. Sales beat the Zacks Consensus Estimate and earnings met the same. Reflecting continued business strength and confidence in its strategy, the company raised its 2025 net sales outlook. As a result, shares of KDP gained 7.6% yesterday.
The company’s third-quarter results were highlighted by robust growth in U.S. Refreshment Beverages and steady sequential improvement in U.S. Coffee. Innovation excellence and effective in-market execution drove market share gains across key categories, while sustained sales momentum and disciplined actions to manage inflationary pressures supported solid earnings performance and free cash flow growth.
KDP remains committed to strengthening its core business while strategically preparing for the next phase of transformation — beginning with the acquisition and integration of JDE Peet’s, followed by its planned separation into two leading, pure-play companies.
Keurig Dr Pepper, Inc Price, Consensus and EPS Surprise
Keurig Dr Pepper, Inc price-consensus-eps-surprise-chart | Keurig Dr Pepper, Inc Quote
KDP’s Quarterly Performance
Net sales of $4.31 billion increased 10.7% year over year on a reported basis and surpassed the Zacks Consensus Estimate of $4.14 billion. On a constant currency basis, net sales increased 10.6%, driven by a 6.4% gain in volume/mix and a 4.2% benefit from favorable net pricing. The acquisition of GHOST contributed 4.4 percentage points to the volume/mix growth.
Adjusted earnings per share (EPS) of 54 cents grew 5.9% year over year. The bottom-line improvement was driven by higher adjusted operating income and gains from minority investments.
The adjusted gross profit rose 7.9% year over year to $2.35 billion, while the adjusted gross margin fell 100 basis points (bps) to 55%.
The adjusted operating income rose 3.9% year over year to $1.09 billion, driven by higher net sales and productivity savings, partially offset by inflationary pressures. Meanwhile, the adjusted operating margin declined 170 basis points year over year to 25.3% in the quarter under review.
A Look at KDP's Segmental Details
Net sales in the U.S. Refreshment Beverages segment increased 14.4% year over year to $2.73 billion, driven by an 11.2% rise in volume/mix and a 3.2% benefit from favorable net pricing. The Zacks Consensus Estimate for sales of this segment was pegged at $2.61 billion for the quarter under review. Segment growth was supported by market share gains in carbonated soft drinks, energy drinks and sports hydration. The acquisition of GHOST contributed 7.2 percentage points to the volume/mix growth.
Adjusted operating income rose 10% year over year to $816 million, representing 29.8% of net sales. This growth was driven by higher net sales and productivity savings, partially offset by inflationary pressures.
Net sales in the U.S. Coffee segment increased 1.5% year over year to $991 million, reflecting a 5.5% benefit from favorable net pricing, partially offset by a 4% decline in volume/mix. The consensus estimate for sales of this segment was pegged at $969.3 billion for the quarter under review. The increase in net sales was primarily driven by K-Cup pricing actions to offset inflation, while lower pod and brewer shipments weighed on performance.
Adjusted operating income rose 2.6% year over year to $317 million, or 32% of net sales. Growth was supported by favorable pricing and cost efficiencies, partially offset by inflationary pressures.
Net sales in the International segment increased 10.5% year over year to $580 million. On a constant currency basis, net sales grew 10.1%, reflecting a 6.1% benefit from favorable net pricing and a 4% increase in volume/mix. The consensus estimate for sales of this segment was pegged at $552.5 billion for the quarter under review. Growth was led by strong performance in key categories, including mineral water in Mexico and single-serve coffee in Canada.
Adjusted operating income declined 4.3% to $155 million, representing 26.7% of net sales. The decrease was primarily due to inflationary pressures, which more than offset the benefits of net sales growth and productivity savings.
KDP Stock Past Three-Month Performance
Image Source: Zacks Investment Research
Financial Health of Keurig
As of Sept. 30, 2025, Keurig’s cash and cash equivalents were $516 million. The company had long-term obligations of $13.5 billion and total stockholders’ equity of $25.3 billion.
Net cash provided by operating activities totaled $639 million in the third quarter of 2025, with the free cash flow amounting to $528 million.
KDP’s 2025 Outlook
KDP raises its full-year net sales outlook and reaffirms EPS guidance for 2025. The company now expects 2025 constant currency net sales growth in the high-single-digit range, up from its prior mid-single-digit growth outlook.
The outlook for adjusted EPS growth remains unchanged in the high-single-digit range. At current exchange rates, foreign currency translation is expected to represent approximately a 0.5 percentage point headwind to both full-year revenue and earnings growth.
Shares of this currently Zacks Rank #4 (Sell) company have lost 13.6% in the past three months against the industry’s 1.1% rise.
Stocks to Consider
We have highlighted three better-ranked stocks from the Consumer Staples sector, namely United Natural Foods, Inc. (UNFI - Free Report) , PepsiCo, Inc. (PEP - Free Report) and Ollie's Bargain Outlet Holdings (OLLI - Free Report) .
United Natural is the leading distributor of natural, organic and specialty food and non-food products, currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
UNFI delivered an earnings surprise of 416.2% in the trailing four quarters, on average. The Zacks Consensus Estimate for United Natural’s current fiscal-year sales and earnings indicates growth of 2.5% and nearly 167.6%, respectively, from the year-ago reported quarter.
PepsiCo is one of the leading global food and beverage companies, currently carrying a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for PepsiCo’s current financial-year sales indicates growth of 1.8%, whereas EPS suggests a decline of 0.6% from the year-ago period’s reported figures. PEP has a trailing four-quarter negative earnings surprise of 1.1%, on average.
Ollie's Bargain Outlet Holdings is a value retailer of brand-name merchandise at drastically reduced prices and currently carries a Zacks Rank #2. OLLI delivered a trailing four-quarter earnings surprise of 4.2%, on average.
The Zacks Consensus Estimate for Ollie's Bargain’s current fiscal-year sales and earnings indicates a rise of around 16.4% and 16.5%, respectively, from the year-earlier levels.