Keurig Dr Pepper Profit Rebounded After JDE Peet’s Acquisition
Net sales reached $7.31 billion after the April acquisition transformed the beverage maker’s business.
Keurig Dr Pepper (KDP), the beverage and coffee company, returned to adjusted earnings growth in the second quarter as JDE Peet’s contributions and stronger cold-drink demand offset pressure in U.S. coffee.
The acquisition reshaped the quarter while the legacy business showed a shifting growth mix. Excluding JDE Peet’s, sales grew 7.3%, compared with 8.1% constant-currency growth in the first quarter. Volume and mix accelerated to 3.1% from 2.6%, while price realization eased to 4.2% from 5.5%.
Total sales rose 75.6% from a year earlier, reflecting the April 1 acquisition. Adjusted earnings increased 16.3% to $0.57 a share, reversing the first quarter’s 7.1% decline. GAAP earnings fell 90% to $0.04 a share as acquisition and integration expenses weighed on reported results.
U.S. Refreshment Beverages led the legacy portfolio, with sales rising 10% to $2.93 billion on 6.5% volume and mix growth. Adjusted operating income increased 11.9% to $874 million. U.S. Coffee sales declined 3.2% to $918 million as an 8.2% volume and mix drop outweighed higher pricing, and adjusted operating income fell 24.7%.
International sales rose 19.6% to $664 million, or 12.4% at constant currency, though adjusted operating income was flat as Mexico’s beverage tax, other costs and marketing spending absorbed the growth. JDE Peet’s contributed $2.80 billion of sales and $414 million of adjusted operating income in its first quarter as a separate segment, while recording a $62 million GAAP operating loss.
Adjusted operating income rose 42.9% to $1.48 billion after declining in the first quarter, but adjusted operating margin narrowed to 20.2% from 24.7% a year earlier. Acquisition-related items included a $314 million inventory step-up and $318 million of acquisition, integration, financing and planned-spinoff costs. Free cash flow increased sequentially to $714 million from $184 million.
Keurig Dr Pepper maintained its 2026 outlook for net sales of $25.9 billion to $26.4 billion and low-double-digit constant-currency adjusted EPS growth, leaving the forecast unchanged from its June update. It also kept its target for year-end pro-forma leverage at approximately 4.1 times as integration costs continued to separate reported profit from the underlying business.