BURLINGTON, Mass. and FRISCO, Texas, USA — Keurig Dr Pepper Inc. reported on Thursday (April 27th) results for the first quarter ended March 31, 2023 and reaffirmed its guidance for full year constant currency net sales growth of 5% and Adjusted diluted EPS growth of 6% to 7%.
The company came out with net sales of $3,353 million beating the Zacks Consensus Estimate of $3,297 million. The company also reported adjusted earnings of 34 cents per share grew 3% year over year and came above the Zacks Consensus Estimate of 33 cents per share.
Driving the consolidated net sales growth was favorable net price realization of 9.9%, only slightly offset by lower volume/mix of 1.0%, reflecting the strength of the Company’s brand portfolio and continued modest elasticities across most categories.
KDP in-market performance in the U.S. Liquid Refreshment Beverages (LRB) category remained strong, with retail dollar consumption2 advancing 13.6% and KDP growing market share in categories representing approximately 88% of its cold beverage retail sales base. The performance reflected strength in CSDs3, seltzers, coconut waters, energy, apple juice and fruit drinks and was driven by Dr Pepper, Canada Dry, A&W, Sunkist, Squirt and Crush CSDs, as well as Polar seltzers, Vita Coco, C4 Energy, Mott’s and Hawaiian Punch.
Total at-home coffee category trends continued to be impacted in the quarter by greater consumer mobility versus the prior year, with the single serve pod segment gaining volume share of the category. U.S. retail dollar consumption of KDP Manufactured pods decreased 0.5% in IRi tracked channels in the quarter, while KDP Manufactured share remained healthy at approximately 81%.
U.S. Coffee
Net sales for the first quarter decreased 1.3% to $931 million, compared to $943 million in the year-ago period. This performance reflected higher net price realization of 5.3%, more than offset by a 6.6% decline in volume/mix.
At-home coffee consumption in the quarter continued to normalize post the pandemic. Pod revenue grew 2.9%, including a shipment decline of 1.9% due primarily to greater mobility versus the prior year. On a trailing twelve-month basis versus the pre-pandemic Q1 2019 period, at-home pod shipments grew 22.8%, representing a mid-single digit compound annual growth rate (CAGR).
Brewer shipments totaled 10.2 million for the twelve months ending March 31, 2023, representing a 9.8% decline year-over-year. Compared against pre-pandemic levels represented by the twelve months ending March 31, 2019, brewer shipments grew 25.6%, representing a mid-single digit CAGR.
GAAP operating income decreased 9.0% to $232 million, compared to $255 million in the year-ago period, largely reflecting the decline in volume/mix, broad-based inflationary pressure and an unfavorable year-over-year impact of items affecting comparability, partially offset by higher net price realization and productivity. Excluding items affecting comparability, Adjusted operating income decreased 5.3% to $285 million and, on a percent of net sales basis, totaled 30.6%.
