BURLINGTON, Mass. and FRISCO, Texas, USA – Keurig Dr Pepper Inc. (KDP) yesterday reported results for the fourth quarter and full year ended December 31, 2024. The Company also provided guidance for 2025. Net sales for the full year increased 3.6% to $15.4 billion. On a constant currency basis, net sales advanced 3.9%, driven by volume/mix growth of 2.7% and favorable net price realization of 1.2%.
GAAP operating income decreased 18.8% to $2.6 billion. The decrease primarily reflected the unfavorable year-over-year impact of items affecting comparability, including $718 million in goodwill and other intangible impairments2 and an accrual for $225 million in upcoming distribution termination payments related to GHOST. Adjusted operating income increased 9.0% to $4.0 billion and totaled 25.9% of net sales. Adjusted operating income growth reflected productivity savings and net sales growth, partially offset by the impact of inflationary pressures and higher SG&A costs, including increased marketing investment.
GAAP net income decreased 33.9% to $1.4 billion, or $1.05 per diluted share, primarily reflecting the decrease in GAAP operating income and the unfavorable year-over-year impact of non-operating items affecting comparability. Adjusted net income increased 4.7% to $2.6 billion and Adjusted diluted EPS increased 7.8% to $1.92. Adjusted diluted EPS growth was driven by the Adjusted operating income growth and a lower share count.
Operating cash flow for the full year increased 67.0% to $2.2 billion and free cash flow increased 81.8% to $1.7 billion.
KDP: U.S. Coffee
Net sales for the full year decreased 2.6% to $4.0 billion, with volume/mix growth of 1.0% more than offset by unfavorable net price realization of 3.6%.
K-Cup pod shipments were flat, driven by solid performance in a gradually improving at-home coffee category.
Brewer shipments totaled 10.4 million for the twelve months ended December 31, 2024, increasing 7.3% year-over-year, supported by stabilizing coffeemaker category trends and Keurig market share momentum.
GAAP operating income decreased 6.8% to $1.1 billion. Adjusted operating income decreased 3.2% to $1.3 billion and totaled 32.5% of net sales. GAAP and Adjusted operating income reflected the net sales decline and the impact of inflationary pressures, which more than offset productivity savings and SG&A efficiencies.
Net sales for the fourth quarter decreased 2.4% to $1.1 billion. Volume/mix grew 0.7%, including a 1.1% increase in K-Cup® pod shipments, which was more than offset by unfavorable net price realization of 3.1%.
GAAP operating income decreased 8.9% to $349 million. Adjusted operating income decreased 5.7% to $399 million and totaled 35.3% of net sales. GAAP and Adjusted operating income reflected the net sales decline and the impact of inflationary pressures, which more than offset productivity savings.
2025 Guidance
The 2025 guidance provided below is presented on a constant currency, non-GAAP basis. The Company does not provide reconciliations of such forward-looking non-GAAP measures to GAAP measures, due to the inability to predict the amount and timing of impacts outside of the Company’s control on certain items, such as non-cash gains or losses resulting from mark-to-market adjustments of derivative instruments, among others, which could be material. Reconciling such items would require unreasonable efforts.
KDP expects net sales growth in a mid-single-digit range and Adjusted diluted EPS growth in a high-single-digit range for 2025 on a constant currency basis, including the anticipated contribution from the recent GHOST acquisition. At current rates, foreign currency translation is forecasted to approximate a one to two percentage point headwind to full year top- and bottom-line growth.
