Keurig Dr Pepper Inc (KDP) Q3 2023 Earnings: Revenue Momentum and Gross Margin Expansion
Q3 net sales increased by 5.1% to $3.81 billion compared to the previous year
GAAP operating income rose by 127.4% to $896 million
Adjusted diluted EPS growth of 4.3% to $0.48
Free cash flow for Q3 totaled $459 million
Keurig Dr Pepper Inc (NASDAQ:KDP) released its Q3 2023 earnings report on October 26, 2023. The company reported a 5.1% increase in net sales to $3.81 billion, compared to $3.62 billion in the same period last year. The GAAP operating income saw a significant rise of 127.4% to $896 million, compared to $394 million in the year-ago period.
Financial Highlights
On a GAAP basis, net income for the quarter increased 187.8% to $518 million, or $0.37 per diluted share, compared to $180 million, or $0.13 per diluted share, in the year-ago period. Adjusted net income for the quarter advanced 1.8% to $673 million, and Adjusted diluted EPS increased 4.3% to $0.48. Operating cash flow for the third quarter was $580 million and free cash flow totaled $459 million.
Segment Performance
Net sales for the U.S. Refreshment Beverages segment increased 5.9% to $2.27 billion, compared to $2.14 billion in the year-ago period. The U.S. Coffee segment saw a decrease in net sales by 3.2% to $1.01 billion, compared to $1.05 billion in the year-ago period. The International segment reported a 20.8% increase in net sales to $523 million, compared to $433 million in the year-ago period.
CEO Commentary
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, said Chairman and CEO Bob Gamgort. We are reaffirming our full year outlook and remain committed to delivering a strong Q4 with an improved composition of earnings.
Future Outlook
KDP reaffirmed its 2023 guidance for constant currency net sales growth of 5% to 6% and Adjusted diluted EPS growth of 6% to 7%. The company also announced its expansion into sports hydration through a new partnership with Grupo PiSA for Electrolit.
Explore the complete 8-K earnings release (here) from Keurig Dr Pepper Inc for further details.
This article first appeared on GuruFocus.
