Dr Pepper Snapple’s Stellar Performance and Raised Outlook in 3Q15
Sales in 3Q15
Dr Pepper Snapple’s (DPS) sales in 3Q15 came in at $1.63 billion, ahead of the consensus Wall Street analyst sales estimates of $1.60 billion. The company announced the results for 3Q15 ended September 30, 2015, on October 22.
Sales growth drivers
In 3Q15, Dr Pepper Snapple’s sales increased by 3% from 3Q14. Sales growth in 3Q15 was driven by a 3% increase in sales volume and 3% favorable impact of product and package mix and price realization. These favorable factors were partially offset by higher discounts in the company’s fountain business, which reduced the net sales growth by 1%. Also, net sales growth was partially offset by 2% of unfavorable foreign currency translation.
Dr Pepper Snapple constitutes 0.3% of the holdings of the iShares Russell Midcap Index ETF (IWR) and 0.5% of the iShares Global Consumer Staples ETF (KXI).
In 3Q15, Coca-Cola’s (KO) revenue declined by 4.6% due to 8% adverse impact of currency headwinds. PepsiCo’s (PEP) 3Q15 revenue declined by 5.2% on a year-over-year basis due to currency headwinds of 12%. Another nonalcoholic beverages maker, Cott Corporation (COT), is scheduled to announce its 3Q15 results on October 28. Cott Corporation’s revenue surged by 42% to $780 million in 2Q15, primarily due to the acquisition of DS Services, a leading bottled water and coffee direct-to-consumer services provider in the US.
In 3Q15, revenue of Dr Pepper Snapple’s Beverage Concentrates segment increased by 2% on a currency-neutral basis. This growth was driven by a 3% volume increase, higher pricing, and a favorable mix, which was partially offset by higher discounts in the company’s fountain business.
The 3Q15 net sales of the Packaged Beverages segment, which manufactures and distributes finished beverages, increased by 6%, excluding the impact of currency headwinds. Its net sales growth in the quarter was due to a favorable product mix, higher branded sales volumes, and higher pricing.
The 3Q15 net sales of Latin America Beverages segment increased by 10% on a currency-neutral basis, due to higher sales volume and a favorable product mix. However, the segment’s reported revenue declined by 10% due to unfavorable foreign currency translation of $27 million.
The next part of this series discusses the growth in Dr Pepper Snapple’s 3Q15 volumes.
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