Keurig Dr Pepper Inc. (KDP): Results of Operations and Financial Condition
Keurig Dr Pepper Inc. (KDP) filed an SEC Form 8-K — Results of Operations and Financial Condition. EXHIBIT 99.1 Keurig Dr Pepper Reports Q2 Results and Reaffirms Guidance for 2026 Performance Led by U.S. Refreshment Beverages and JDE Peet’s Company Reaffirms 2026 Constant Currency Net Sales and Adjusted EPS Outlook Company Continues to Target a Pro-Forma Management Leverage Ra
How this was made
The 30-second read
Why it matters
Traders can update models using the provided Q2 segment performance, consolidated cash flow, and the explicit 2026 net sales and adjusted diluted EPS growth ranges, plus the pro-forma leverage target of about 4.1x at year-end.
Market read
This is a primary earnings-and-guidance disclosure with explicit full-year ranges and leverage framing, which can drive same-day positioning and near-term revisions.
What to watch
GAAP operating income and GAAP net income fell sharply due to comparability items and acquisition/integration costs, which could matter for investors focused on GAAP earnings quality.
Keurig Dr Pepper Reports Q2 Results and Reaffirms Guidance for 2026
Adjusted diluted EPS increased 16.3% to $0.57, legacy KDP net sales increased 7.3%, U.S. Refreshment Beverages delivered 10.0% net-sales growth, and the company reaffirmed 2026 guidance. GAAP operating income and GAAP net income declined because of items affecting comparability, including acquisition and integration-related costs.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $7.31 bn | – | 75.6% |
| Net salesnon-GAAP | $7.31 bn | – | 74.6% |
| Year-to-date net salesGAAP | $11.29 bn | – | 44.7% |
| Year-to-date net salesnon-GAAP | $11.29 bn | – | 43.6% |
| Legacy KDP net salesother | $7.3 billion | – | 7.3% |
| GAAP operating incomeGAAP | $628 million | – | (30.1)% |
| Adjusted operating incomenon-GAAP | $1,478 million | – | 42.9% |
| Adjusted operating income as a percentage of net salesnon-GAAP | 20.2% of net sales | – | – |
| GAAP net income attributable to common shareholdersGAAP | $60 million | – | (89.0)% |
| Adjusted net income attributable to common shareholdersnon-GAAP | $783 million | – | 15.2% |
| Diluted EPSGAAP | $0.04 | – | (90.0)% |
| Adjusted diluted EPSnon-GAAP | $0.57 | – | 16.3% |
| Year-to-date diluted EPSGAAP | $0.24 | – | (69.2)% |
| Year-to-date adjusted diluted EPSnon-GAAP | $0.97 | – | 4.3% |
| Operating cash flowGAAP | $895 million | – | – |
| Free cash flowother | $714 million | – | – |
| U.S. Refreshment Beverages GAAP operating incomeGAAP | $857 million | – | 14.9% |
| U.S. Refreshment Beverages adjusted operating incomenon-GAAP | $874 million | – | 11.9% |
| U.S. Coffee GAAP operating incomeGAAP | $149 million | – | (36.1)% |
| U.S. Coffee adjusted operating incomenon-GAAP | $225 million | – | (24.7)% |
| JDE Peet’s GAAP operating lossGAAP | $62 million | – | – |
| JDE Peet’s adjusted operating incomenon-GAAP | $414 million | – | – |
| KDP International GAAP operating incomeGAAP | $152 million | – | 6.3% |
| KDP International adjusted operating incomenon-GAAP | $155 million | – | flat year-over-year |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| U.S. Refreshment BeveragesVolume/mix growth of 6.5% and favorable net price realization of 3.5%. | $2.9 billion | – | 10.0% |
| U.S. CoffeeVolume/mix declined 8.2%, including an unfavorable impact from a reporting shift of Peet’s K-Cup pods into the JDE Peet’s segment, which more than offset favorable net price realization of 5.0%. | $918 million | – | (3.2)% |
| JDE Peet’sThe JDE Peet’s acquisition closed on April 1, and the segment contribution was wholly incremental to the Company on a year-over-year basis. | $2.8 billion | – | – |
| KDP InternationalConstant currency net sales increased 12.4%, driven by volume/mix growth of 6.5% and favorable net price realization of 5.9%. | $664 million | – | 19.6% |
2026 outlook
- Revenue$25.9-$26.4 billion
- Noteconstant currency Adjusted diluted EPS growth in a low-double-digit range
- Note4-6% constant currency net sales growth for KDP’s legacy business
- Note4-6% constant currency Adjusted diluted EPS growth for KDP’s legacy business
- NoteAt current exchange rates, foreign currency translation is forecasted to approximate a one percentage point tailwind to 2026 full year net sales and EPS growth.
- NoteThe Company expects to end 2026 with a pro-forma management leverage ratio of approximately 4.1x.
What drove it
- Consolidated adjusted operating income growth was driven by net sales growth, productivity savings, and the JDE Peet’s acquisition, partially offset by inflationary pressures and higher SG&A expenses, including increased marketing.
- Legacy KDP net sales growth was driven by favorable net price realization of 4.2% and volume/mix growth of 3.1%.
- U.S. Refreshment Beverages adjusted operating income growth was driven by net sales growth and productivity savings.
- JDE Peet’s acquisition closed on April 1.
- KDP International adjusted operating income was driven by net sales growth and productivity savings, offset by cost pressures, including the Mexico beverage tax, and increased marketing.
Concerns
- GAAP operating income decreased 30.1% to $628 million, including an unfavorable year-over-year impact of items affecting comparability.
- GAAP net income attributable to common shareholders decreased 89.0% to $60 million, primarily due to items affecting comparability, including acquisition and integration-related costs.
- U.S. Coffee net sales decreased 3.2% to $918 million and adjusted operating income decreased 24.7% to $225 million.
- U.S. Coffee volume/mix declined 8.2%, including an unfavorable impact from the reporting shift of Peet’s K-Cup pods into the JDE Peet’s segment.
- Adjusted diluted EPS growth was partly offset by higher Adjusted interest expense, non-controlling interest, and earnings allocated to preferred investors.
What to watch
- Delivery of 4-6% constant currency net sales growth and 4-6% constant currency Adjusted diluted EPS growth for KDP’s legacy business in 2026.
- Performance in U.S. Coffee following the 8.2% volume/mix decline and the reporting shift of Peet’s K-Cup pods.
- Integration of JDE Peet’s, including initial cost synergies and acquisition and integration-related costs.
- Progress toward a successful separation in early 2027.
- Progress toward the targeted pro-forma management leverage ratio of approximately 4.1x at year-end.
Balance sheet and cash flow
- Operating cash flow for the second quarter was $895 million.
- Free cash flow totaled $714 million.
- The Company expects to end 2026 with a pro-forma management leverage ratio of approximately 4.1x.
Analysis
KDP reported Q2 net sales of $7.31 bn on both a reported GAAP and adjusted basis, with reported growth of 75.6% and adjusted growth of 74.6%. The JDE Peet’s acquisition was the principal contributor to consolidated expansion, while legacy KDP net sales increased 7.3%, supported by favorable net price realization of 4.2% and volume/mix growth of 3.1%.
Underlying operating performance was led by U.S. Refreshment Beverages. Segment net sales increased 10.0% to $2.9 billion, driven by 6.5% volume/mix growth and 3.5% favorable net price realization. Its adjusted operating income increased 11.9% to $874 million and totaled 29.9% of net sales. KDP International also posted 19.6% reported net-sales growth to $664 million and 12.4% constant-currency growth, although adjusted operating income of $155 million was flat year-over-year amid cost pressures, the Mexico beverage tax, and increased marketing.
Coffee results were uneven. JDE Peet’s contributed $2.8 billion of net sales and $414 million of adjusted operating income after the acquisition closed on April 1. In contrast, U.S. Coffee net sales declined 3.2% to $918 million, with an 8.2% volume/mix decline that included the reporting shift of Peet’s K-Cup pods into JDE Peet’s. U.S. Coffee adjusted operating income declined 24.7% to $225 million as inflationary pressures, lower volume/mix, and increased marketing outweighed price realization and productivity savings.
Consolidated adjusted operating income increased 42.9% to $1,478 million and reached 20.2% of net sales. Adjusted diluted EPS increased 16.3% to $0.57, while GAAP diluted EPS declined 90.0% to $0.04 and GAAP net income attributable to common shareholders declined 89.0% to $60 million, primarily because of items affecting comparability, including acquisition and integration-related costs. Operating cash flow was $895 million and free cash flow totaled $714 million, which management cited as supporting balance-sheet deleveraging.
The company reaffirmed 2026 net-sales guidance of $25.9-$26.4 billion and constant currency Adjusted diluted EPS growth in a low-double-digit range. The outlook includes 4-6% constant currency net-sales growth and 4-6% constant currency Adjusted diluted EPS growth for the legacy business, plus an incremental contribution from JDE Peet’s. Management continues to target a pro-forma management leverage ratio of approximately 4.1x at year-end and is preparing for a separation in early 2027.
Management, verbatim
We delivered another strong quarter of results, with Q2 EPS exceeding our expectations. U.S. Refreshment Beverages generated double-digit top- and bottom-line growth, KDP International sequentially improved as planned, and our combined coffee platform delivered solid performance, with healthy JDE Peet’s results balanced against U.S. Coffee pressures. We also made meaningful progress on our integration and separation work, including capturing initial cost synergies, advancing key organizational readiness milestones, and generating robust free cash flow to support balance sheet deleveraging. At the midpoint of the year, we remain on track to achieve our 2026 financial and transformation commitments while preparing for a successful separation in early 2027.”
Tim Cofer, CEO
Not in the filing
stated, not guessed- Period-end date
- Gross profit and gross margin
- Operating expenses
- Tax rate
- Cash balance
- Debt balance
- Share repurchases
- Dividends
- Capital-return amounts
- GAAP operating cash flow comparison to prior year or prior quarter
- Free cash flow comparison to prior year or prior quarter
- Prior-year and prior-quarter dollar values for reported metrics
- Prior-quarter percentage changes for reported metrics
- Prior outlook for comparison
- Guidance for gross margin, operating expenses, and tax rate
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Keurig Dr Pepper filed an SEC 8-K with its Q2 2026 results and a reaffirmation of full-year 2026 constant-currency, non-GAAP guidance, including integration and separation progress toward an early-2027 separation.
Ticker impact
KDP reported Q2 2026 results and reaffirmed 2026 constant-currency guidance, including net sales and adjusted EPS outlook.
Moderate positive bias for the stock as guidance is reaffirmed and free cash flow supports balance-sheet deleveraging.
The filing provides fresh, decision-relevant numbers (Q2 EPS, free cash flow) plus explicit 2026 net sales and adjusted EPS growth ranges and a 4.1x leverage target.
Market effects
Signals resilience in U.S. refreshment beverages and coffee integration progress, which can influence sentiment across packaged beverages and coffee-adjacent peers.
Limited direct regional read-through beyond U.S. and international segment commentary.
International constant-currency framing and FX tailwind assumptions may affect how investors model multinational beverage earnings sensitivity.
Counterpoint
U.S. Coffee net sales and adjusted operating income declined, so the consolidated beat may be more integration- and acquisition-mix driven than broad-based demand strength.
Key entities
- issuerKeurig Dr Pepper Inc.
Reported Q2 2026 results and reaffirmed 2026 guidance, including constant-currency net sales and adjusted diluted EPS growth ranges.
- acquired businessJDE Peet’s
Acquisition contribution is described as incremental to KDP on a year-over-year basis, affecting segment results and integration costs.
- executiveTim Cofer
CEO quoted on Q2 performance, integration progress, free cash flow, and preparation for separation in early 2027.
