Keurig Dr Pepper Inc

Strong Q2 financial results; EPS beat and profitability up - Consolidated net sales grew 74.6% YoY (includes JDE Peet’s acquisition impact; legacy KDP net sales grew 7.3%). - Consolidated operating income up ~42.9%; EPS +16.3% to $0.57 (ahead of expectations). - Free cash flow: $714M in Q2; company continues targeting ~$2.5B full-year FCF.

Guidance reaffirmed for 2026 (with small accounting/margin-related neutral offset) - Full-year net sales: $25.9B–$26.4B, including $8.5B–$8.7B from JDE Peet’s. - Full-year EPS: low double-digit constant-currency growth unchanged; expected contributions: ~6–7 pts from JDE Peet’s plus 4–6% legacy KDP. - Notes/changes that matter: an incremental ~2% noncash EPS headwind from JDE Peet’s purchase price allocation effects and an offsetting expected one-time cash benefit from tariff refunds → net impact largely neutral to full-year EPS.

Big drivers: U.S. Refreshment Beverages strong; Coffee mixed with U.S. under pressure - U.S. Refreshment Beverages: net sales +10% with double-digit operating income growth (+11.9%). Key volume mix driver: +6.5 pts volume mix and +3.5 pts price. - Momentum areas: CSDs (Dr Pepper; Zero Sugar ~30% retail sales growth), Canada Dry, Fruit Splash, prebiotic CSD growth (Bloom Pop leading gainers); energy (surpassed 9% category share threshold; strong Bloom & GHOST), plus water/sports hydration. - Coffee overall: enterprise looked solid, but U.S. Coffee weaker: - Legacy U.S. Coffee net sales -low single digits; operating income -25% YoY. - Primary negatives: higher green coffee costs + tariff impacts flowing through P&L due to hedging/inventory timing; single-serve category volume decline and unfavorable mix (more private label/value seeking) plus trade inventory headwinds. - JDE Peet’s: exceeded expectations with $2.8B net sales and $414M operating income; profitability supported by pricing discipline, productivity savings, and timing benefits (but management flagged timing effects).