Keurig Dr Pepper beat Wall Street estimates for third-quarter sales as higher prices and steady demand for its sodas and drinks helped limit the hit from a slowing coffee business.
The company and rivals Coca-Cola and PepsiCo have been raising prices to counter higher commodity, freight and labour costs following the pandemic-induced supply chain snags that were compounded by Russia's invasion of Ukraine.
Both Coca-Cola and PepsiCo also topped third-quarter estimates this month.
Keurig Dr Pepper has also largely withstood a trade-down to private label and has not witnessed a decline in demand from the price hikes.
Third-Quarter Report
Net sales for the third quarter increased 5.1% to $3.81 billion (€3.6 billion), beating estimates of $3.77 billion (€3.6 billion), according to LSEG data. Excluding items, the company reported a profit of 48 cents per share topping estimates of 47 cents.
However, the US coffee segment remained under pressure, with net sales falling 3.2% to $1.01 billion (€960 million).
Coffee sales boomed during the pandemic as people spent more time at home but demand eased as people ventured out more.
Keurig Dr Pepper, however, reaffirmed its fiscal 2023 adjusted earnings per share to rise 6% to 7% and net sales to grow 5% to 6%.
'Healthy Revenue Momentum'
Chairman and CEO Bob Gamgort said, "In the third quarter, we maintained healthy revenue momentum and delivered a significant gross margin inflection, helping to fund reinvestment in our brands and capabilities".
"Over the past 12 months, we have established new growth platforms in sports hydration, energy and RTD coffee by partnering with compelling brands and leveraging our unique distribution assets across both cold and hot beverages to attract strong partnerships," he added.
News by Reuters, additional reporting by ESM.
