Yahoo Finance Keurig (KDP) Stock Gains as Q1 Earnings & Sales Top Estimates
Keurig Dr Pepper Inc. KDP has reported first-quarter 2024 results, wherein the top and bottom lines surpassed the Zacks Consensus Estimate. Both earnings and revenues improved year over year. Results have gained from continued brand strength and significant price realization.
Adjusted earnings of 38 cents per share grew 11.8% year over year and beat the Zacks Consensus Estimate of 34 cents. Earnings gains resulted from improved operating income and lower share count, partly offset by a higher tax rate and interest expenses.
Net sales of $3,468 million surpassed the Zacks Consensus Estimate of $3,422 million and increased 3.4% from the year-ago quarter. On a constant-currency basis, net sales improved 2.8% year over year in the first quarter. The increase was aided by a 3.1% rise in net price realization, offset by a 0.3% decline in the volume/mix. Continued strength in the company's brand portfolio and elasticity across most categories aided revenues.
Keurig Dr Pepper, Inc Price, Consensus and EPS Surprise
Keurig Dr Pepper, Inc price-consensus-eps-surprise-chart | Keurig Dr Pepper, Inc Quote
Adjusted gross profit rose 10.4% year over year to $1.95 billion, with a year-over-year gross margin expansion of 350 basis points (bps) to 56.2%.
Adjusted operating income rose 18% year over year to $825 million in the quarter. Meanwhile, the adjusted operating margin expanded 300 bps year over year to 23.8%. The increase in the adjusted operating margin resulted from improved net price realization and net productivity, negated by the marginal volume-mix decline and elevated SG&A expenses, including higher marketing investments.
Shares of KDP rallied 5.5% following the strong first-quarter 2024 results. Shares of this currently Zacks Rank #3 (Hold) company have gained 1.1% in the past three months compared with the industry’s 3.6% rise.
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Segmental Details
Sales in the U.S. Refreshment Beverages segment totaled $2.1 billion, up 4.3% year over year, reflecting 5.6% higher net price realization, partly negated by a 1.3% decline in the volume/mix. The results have also been aided by higher pricing, persistent elasticities across most categories and contribution from KDP's recently commenced distribution partnership with Nutrabolt for C4 Energy.
Sales in the U.S. Coffee segment declined 2.1% year over year to $911 million, reflecting a net price decline of 1.8% and a marginally lower volume/mix of 0.3%. The company witnessed a 1.1% year-over-year decline in K-pod shipments due to improved market share trends across its owned and licensed portfolio. However, K-pod shipments improved on a sequential basis. Brewer shipments totaled 10 million in the 12 months ending Mar 31, 2024, down 1.9% year over year.
Sales in the International segment rose 11.8% year over year to $464 million. On a constant-currency basis, the segment’s net sales advanced 7%, gaining from a favorable net price realization of 2.2% and a volume/mix rise of 4.8%. Also, solid momentum across markets aided the results.
Financials
As of Mar 31, 2024, Keurig Dr Pepper’s cash and cash equivalents were $317 million. KDP had long-term obligations of $12.9 billion and a total stockholders’ equity of $24.7 billion.
Net cash provided by operating activities totaled $85 million at the end of first-quarter 2024. The company generated a negative free cash flow of $73 million in the first quarter.
Outlook
Keurig Dr Pepper reaffirmed its 2024 view. The company expects 2024 constant-currency net sales growth in the mid-single digits. It anticipates adjusted earnings per share growth in the high-single digits.
Stocks to Consider
We have highlighted three better-ranked stocks from the Consumer Staples sector, namely Coca-Cola FEMSA KOF, Vita Coco Company COCO and Diageo DEO.
Coca-Cola FEMSA currently has a Zacks Rank #2 (Buy). KOF shares have risen 4% in the past three months. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Coca-Cola FEMSA’s current financial-year sales and EPS suggests growth of 10.7% and 25.1%, respectively, from the year-ago period’s reported figures. KOF has a trailing four-quarter negative earnings surprise of 2.1%, on average.
Vita Coco currently carries a Zacks Rank #2. COCO shares have rallied 20.4% in the past three months. The company has a trailing four-quarter earnings surprise of 31.3%, on average.
The Zacks Consensus Estimate for Vita Coco’s current financial-year sales and earnings suggests growth of 1.8% and 24.3%, respectively, from the year-ago period’s reported figure.
Diageo currently carries a Zacks Rank #2. DEO shares have declined 2.9% in the past three months.
The Zacks Consensus Estimate for Diageo’s current financial-year sales suggests growth of 10.8% from the year-ago period's reported figures. The consensus mark for the company’s earnings per share indicates a decline of 8.2% from the year-ago quarter’s actual.
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Vita Coco Company, Inc. (COCO) : Free Stock Analysis Report
Diageo plc (DEO) : Free Stock Analysis Report
Coca Cola Femsa S.A.B. de C.V. (KOF) : Free Stock Analysis Report
Keurig Dr Pepper, Inc (KDP) : Free Stock Analysis Report
