Keurig Dr Pepper missed market expectations for fourth-quarter sales as higher product prices deterred demand for the beverage maker's sodas and tonic water.
Beverage makers have been hiking prices in a bid to counter soaring costs of commodities like coffee and sugar, but sticky inflation has turned consumers frugal, leading to softer volumes for soda makers including Keurig and bigger rival PepsiCo.
Keurig Dr Pepper posted quarterly net sales of $3.87 billion, compared with analysts' average estimate of $3.91 billion, according to LSEG data, its first quarterly sales miss in five.
Performance Highlights
In fiscal 2023, its volumes fell 2.1%, while prices were up 7%, resulting in adjusted gross profit margin growth of 150 basis points.
The 7UP soda maker's quarterly adjusted profit came in at 55 cents per share, compared with estimates of 54 cents.
Net sales at its US coffee business, one of its core segments, fell 9.9% to $1.2 billion, as volumes fell 10.7% amid a slowdown in at-home coffee consumption globally.
The company also forecast fiscal 2024 adjusted profit per shares above estimates.
'A Year Of Significant Progress'
Chairman and CEO Bob Gamgort commented, "2023 was a year of significant progress for KDP. Broad-based market share gains across our portfolio and entries into attractive white spaces supported our revenue momentum.
"Gross margin expansion resumed, as the relationship between inflation, pricing, and our redoubled productivity efforts improved throughout the year and helped fund investments in our brands and capabilities. We delivered on our financial commitments while simultaneously enhancing the composition of our earnings profile and strengthening our balance sheet.
News by Reuters, additional reporting by ESM.
