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Keurig Dr Pepper Inc. (KDP - Free Report) came out with second-quarter 2024 results, wherein both the top and bottom lines improved year over year, and sales came ahead of the Zacks Consensus Estimate. Shares of KDP were up more than 3% in the pre-market trading session on Jul 25.
The second-quarter show reflected accelerating net sales trends, considerable margin growth and solid earnings improvement. Robust execution drove the company's performance as it continued to pursue its long-term strategic goals.
Keurig Dr Pepper is benefiting from its consumer-centric innovation model, portfolio expansion into higher growth categories and efforts to strengthen an already strong route-to-market. These endeavors are supported by a constant focus on cost efficiency and capital discipline. KDP is on track to meet its reaffirmed full-year view, alongside initiating projects to sustain growth over multiple years.
Quarter in Detail
Adjusted earnings of 45 cents per share grew 7.1% year over year and came in line with the Zacks Consensus Estimate. The bottom-line growth resulted from a robust operating income increase and a reduced share count, partly negated by an elevated tax rate and interest expenses.
Keurig Dr Pepper, Inc Price, Consensus and EPS Surprise
Net sales of $3,922 million surpassed the Zacks Consensus Estimate of $3,901 million and increased 3.5% year over year. On a constant-currency basis, net sales improved 3.4%, backed by the higher volume/mix (up 1.8%) and increased net price realization (up 1.6%). Sales were fueled by strength in the International and the U.S. Refreshment Beverages segments.
The adjusted gross profit rose 4.6% year over year to $2,172 million, with the adjusted gross margin expanding 130 basis points (bps) to 56.1%.
The adjusted operating income rose 11% year over year to $970 million in the quarter due to improved net price realization and net productivity. Meanwhile, the adjusted operating margin expanded 170 bps year over year to 24.7%.
Segmental Details
Sales in the U.S. Refreshment Beverages segment totaled $2,407 million, up 3.3% year over year, reflecting 2.9% higher net price realization, and 0.4% growth in volume/mix. The volume/mix improvement benefited from expanded scale from recent collaborations and in-market strength from launched innovation.
Sales in the U.S. Coffee segment declined 2.1% year over year to $950 million, reflecting a net price decrease of 2.9%, somewhat compensated by a volume/mix improvement of 0.8%. The company witnessed a marginal 0.2% year-over-year increase in K-pod shipments on robust market share trends across its owned and licensed portfolio. Brewer shipments totaled 10.1 million in the 12 months ending Jun 30, 2024, up 1.4% year over year, driven by continued strength in Keurig's market share.
Sales in the International segment advanced 15.5% year over year to $565 million. On a constant-currency basis, the segment’s net sales jumped 14.7%, gaining from a favorable net price realization of 4.3% and a volume/mix rise of 10.4%. The segment witnessed broad-based portfolio strength.
Other Financials
As of Jun 30, 2024, Keurig Dr Pepper’s cash and cash equivalents were $438 million. KDP had long-term obligations of $12,406 million and total stockholders’ equity of $24,718 million.
Net cash provided by operating activities totaled $742 million for the first six months of 2024, with the free cash flow amounting to $470 million.
Guidance
Keurig Dr Pepper reiterated its 2024 guidance. The company expects 2024 constant-currency net sales growth in the mid-single digits. It continues to envision adjusted earnings per share growth in the high-single digits.
Shares of this currently Zacks Rank #4 (Sell) company have declined 2.8% in the past three months compared to the industry’s 0.2% rise.
The Zacks Consensus Estimate for Freshpet’s current financial-year sales and earnings indicates growth of 24.8% and 177.1%, respectively, from the prior-year reported level.
BRF (BRFS - Free Report) , which engages in raising, producing and slaughtering poultry and pork for processing, production and sale of fresh meat, processed products, pasta, margarine, pet food and other products, currently sports a Zacks Rank #1.
The Zacks Consensus Estimate for BRF’s current financial-year sales and earnings suggests growth of 7.5% and 210%, respectively, from the year-ago reported figures.
Vital Farms (VITL - Free Report) , which provides pasture-raised products, currently sports a Zacks Rank #1. The Zacks Consensus Estimate for Vital Farms’ current financial-year sales and earnings indicates growth of 22.6% and 64.4%, respectively, from the prior-year reported level.
VITL has a trailing four-quarter average earnings surprise of 102.1%.
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Keurig (KDP) Q2 Earnings Meet Estimates, Volumes Drive Sales
Keurig Dr Pepper Inc. (KDP - Free Report) came out with second-quarter 2024 results, wherein both the top and bottom lines improved year over year, and sales came ahead of the Zacks Consensus Estimate. Shares of KDP were up more than 3% in the pre-market trading session on Jul 25.
The second-quarter show reflected accelerating net sales trends, considerable margin growth and solid earnings improvement. Robust execution drove the company's performance as it continued to pursue its long-term strategic goals.
Keurig Dr Pepper is benefiting from its consumer-centric innovation model, portfolio expansion into higher growth categories and efforts to strengthen an already strong route-to-market. These endeavors are supported by a constant focus on cost efficiency and capital discipline. KDP is on track to meet its reaffirmed full-year view, alongside initiating projects to sustain growth over multiple years.
Quarter in Detail
Adjusted earnings of 45 cents per share grew 7.1% year over year and came in line with the Zacks Consensus Estimate. The bottom-line growth resulted from a robust operating income increase and a reduced share count, partly negated by an elevated tax rate and interest expenses.
Keurig Dr Pepper, Inc Price, Consensus and EPS Surprise
Keurig Dr Pepper, Inc price-consensus-eps-surprise-chart | Keurig Dr Pepper, Inc Quote
Net sales of $3,922 million surpassed the Zacks Consensus Estimate of $3,901 million and increased 3.5% year over year. On a constant-currency basis, net sales improved 3.4%, backed by the higher volume/mix (up 1.8%) and increased net price realization (up 1.6%). Sales were fueled by strength in the International and the U.S. Refreshment Beverages segments.
The adjusted gross profit rose 4.6% year over year to $2,172 million, with the adjusted gross margin expanding 130 basis points (bps) to 56.1%.
The adjusted operating income rose 11% year over year to $970 million in the quarter due to improved net price realization and net productivity. Meanwhile, the adjusted operating margin expanded 170 bps year over year to 24.7%.
Segmental Details
Sales in the U.S. Refreshment Beverages segment totaled $2,407 million, up 3.3% year over year, reflecting 2.9% higher net price realization, and 0.4% growth in volume/mix. The volume/mix improvement benefited from expanded scale from recent collaborations and in-market strength from launched innovation.
Sales in the U.S. Coffee segment declined 2.1% year over year to $950 million, reflecting a net price decrease of 2.9%, somewhat compensated by a volume/mix improvement of 0.8%. The company witnessed a marginal 0.2% year-over-year increase in K-pod shipments on robust market share trends across its owned and licensed portfolio. Brewer shipments totaled 10.1 million in the 12 months ending Jun 30, 2024, up 1.4% year over year, driven by continued strength in Keurig's market share.
Sales in the International segment advanced 15.5% year over year to $565 million. On a constant-currency basis, the segment’s net sales jumped 14.7%, gaining from a favorable net price realization of 4.3% and a volume/mix rise of 10.4%. The segment witnessed broad-based portfolio strength.
Other Financials
As of Jun 30, 2024, Keurig Dr Pepper’s cash and cash equivalents were $438 million. KDP had long-term obligations of $12,406 million and total stockholders’ equity of $24,718 million.
Net cash provided by operating activities totaled $742 million for the first six months of 2024, with the free cash flow amounting to $470 million.
Guidance
Keurig Dr Pepper reiterated its 2024 guidance. The company expects 2024 constant-currency net sales growth in the mid-single digits. It continues to envision adjusted earnings per share growth in the high-single digits.
Shares of this currently Zacks Rank #4 (Sell) company have declined 2.8% in the past three months compared to the industry’s 0.2% rise.
3 Staple Bets Looking Good
Freshpet, Inc. (FRPT - Free Report) , a pet food company, has a trailing four-quarter earnings surprise of 118.2%, on average. FRPT currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Freshpet’s current financial-year sales and earnings indicates growth of 24.8% and 177.1%, respectively, from the prior-year reported level.
BRF (BRFS - Free Report) , which engages in raising, producing and slaughtering poultry and pork for processing, production and sale of fresh meat, processed products, pasta, margarine, pet food and other products, currently sports a Zacks Rank #1.
The Zacks Consensus Estimate for BRF’s current financial-year sales and earnings suggests growth of 7.5% and 210%, respectively, from the year-ago reported figures.
Vital Farms (VITL - Free Report) , which provides pasture-raised products, currently sports a Zacks Rank #1. The Zacks Consensus Estimate for Vital Farms’ current financial-year sales and earnings indicates growth of 22.6% and 64.4%, respectively, from the prior-year reported level.
VITL has a trailing four-quarter average earnings surprise of 102.1%.