Keurig Dr Pepper reaffirms forecast on strong soda, energy drink demand

By Savyata Mishra

Aug 6 (Reuters) - Keurig ‌Dr Pepper on ​Thursday ​left its annual forecasts unchanged after beating analysts' estimates for second-quarter sales and profit, helped by strength in its sodas and energy drinks portfolios, ‌even as it navigates weakness in its coffee business.

The better-than-expected results ⁠come as Keurig Dr Pepper works to reshape its business following its $18 billion acquisition of Dutch coffee ‌and tea maker JDE Peet's ‌in April and prepares to separate its coffee and beverage operations into two U.S.-listed public companies.

Shares of the Dr Pepper soda maker jumped 6% in early trading. ​The stock has gained nearly 10% this year.

CEO Tim Cofer said the company remained on track to meet its 2026 financial and operational targets and was ⁠continuing preparations for its planned separation in early 2027.

Sales in the U.S. Refreshment Beverages division, its primary growth driver, ​jumped 10% in the quarter, supported by strong demand for Dr Pepper Zero Sugar, Ghost energy drinks and Electrolit hydration products.

"The earnings ​beat led by strong topline and gross margin ‌performance, which, coupled with its guidance reiteration should be well received for a stock that has been gaining more investor interest ⁠of late," J.P.Morgan analysts said.

The company's U.S. coffee business remained under pressure from a cautious consumer seeking out lower-priced options. Segment sales fell 3.2% in the quarter, hurt by an 8.2% ⁠decline in volume that more than offset a 5% increase in prices.

Like several packaged food and beverage ​companies, Keurig Dr Pepper has leaned on a combination of price hikes and cost-savings efforts to offset inflation at a time when consumers remain value conscious.

Keurig Dr Pepper's net sales surged 75.6% ‌to $7.31 billion, helped by the JDE Peet's acquisition. Analysts on average expected $7.24 billion, according to data compiled by LSEG.

It earned a ‌profit of 57 cents per share on an adjusted basis, above expectations of 54 cents ⁠per share.

Keurig Dr Pepper expects 2026 ‌net sales in the ​range of $25.9 billion to $26.4 billion and adjusted earnings per share growth in a low double-digit range.

(Reporting by Savyata Mishra in Bengaluru; Editing by ‌Joyjeet Das)

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