BURLINGTON, Mass. and FRISCO, Texas, USA – Keurig Dr Pepper Inc. yesterday reported results for the second quarter of 2024 and reaffirmed its full year guidance. Commenting on the quarter, CEO Tim Cofer stated, “Our second quarter results were healthy, with accelerating net sales trends, significant margin expansion, and solid EPS growth. Strong execution drove our performance, as we continued to advance our long-term strategic agenda.
Our consumer-centric innovation model is resonating in market, our portfolio expansion to higher growth categories is ongoing, and we are actively enhancing an already robust route-to-market — all underpinned by an unrelenting focus on cost efficiency and capital discipline.
Now halfway through 2024, we are on track to achieve our unchanged full year outlook, while also seeding initiatives to fuel consistent growth over multiple years.”
Keurig Dr Pepper: Second Quarter Consolidated Results
Net sales for the second quarter increased 3.5% to $3.9 billion. On a constant currency basis, net sales advanced 3.4%, driven by volume/mix growth of 1.8% and higher net price realization of 1.6%.
GAAP operating income increased 12.0% to $861 million. Adjusted operating income increased 11.0% to $970 million and totaled 24.7% as a percent of net sales. GAAP and Adjusted operating income growth primarily reflected the benefits of higher net price realization and net productivity.
GAAP net income increased 2.4% to $515 million, or $0.38 per diluted share. Adjusted net income increased 3.2% to $618 million, and Adjusted diluted EPS increased 7.1% to $0.45. GAAP and Adjusted diluted EPS growth was driven by the strong operating income growth and a lower share count, partly offset by higher interest expense and a higher tax rate.
Operating cash flow for the second quarter was $657 million and free cash flow totaled $543 million.
U.S. Refreshment Beverages
Net sales for the second quarter increased 3.3% to $2.4 billion, driven by net price realization of 2.9% and volume/mix growth of 0.4%. This volume/mix performance reflected increased scale from recent partnerships and in-market traction from launched innovation.
GAAP operating income increased 14.0% to $717 million. Adjusted operating income increased 11.9% to $723 million and totaled 30.0% as a percent of net sales. GAAP and Adjusted operating income growth was driven by higher net price realization and net productivity.
U.S. Coffee
Net sales for the second quarter decreased 2.1% to $1.0 billion, with volume/mix growth of 0.8% more than offset by a net price decline of 2.9%.
K-Cup Pod shipments increased 0.2%, led by strong market share trends in the Company’s owned & licensed portfolio.
Brewer shipments totaled 10.1 million for the twelve months ending June 30, 2024, increasing 1.4% year-over-year, reflecting continued Keurig market share momentum.
GAAP operating income decreased 8.8% to $228 million, primarily due to certain unfavorable year-over-year impact of items affecting comparability. Adjusted operating income increased 0.3% to $293 million and totaled 30.8% as a percent of net sales. Adjusted operating income reflected the benefit of net productivity, offset by the continued impact of targeted value investments.
International
Net sales for the second quarter increased 15.5% to $0.6 billion. On a constant currency basis, net sales advanced 14.7%, driven by volume/mix growth of 10.4% and net price realization of 4.3%. This performance reflected broad-based strength across the portfolio.
GAAP operating income increased 33.9% to $150 million. Adjusted operating income increased 30.2% to $152 million and totaled 26.9% as a percent of net sales. GAAP and Adjusted operating income growth was driven by the strong net sales growth and net productivity, partially offset by a meaningful increase in marketing investment.
Keurig Dr Pepper: 2024 Guidance
Keurig Dr Pepper reaffirmed its fiscal 2024 guidance for constant currency net sales growth in a mid-single-digit range and Adjusted diluted EPS growth in a high-single-digit range.
