Aug 6, 2026, 7:02 AM ETConsumer Defensive

Keurig Dr Pepper — Q2 2026 Earnings Summary

KDPKEURIG DR PEPPER INC

Financial Performance

Consolidated net sales increased 75.6% year-over-year to $7.31 billion for the second quarter, and 44.7% to $11.29 billion year-to-date (YTD); on a constant currency basis, Q2 sales grew 74.6% and YTD sales grew 43.6%.
Excluding the JDE Peet's acquisition, legacy KDP net sales increased 7.3% in Q2, driven by favorable net price realization of 4.2% and volume/mix growth of 3.1%.
GAAP diluted EPS was $0.04 for Q2 (down 90.0% YoY) and $0.24 YTD (down 69.2% YoY).
Adjusted diluted EPS was $0.57 for Q2 (up 16.3% YoY) and $0.97 YTD (up 4.3% YoY).
GAAP operating income decreased 30.1% to $628 million in Q2; Adjusted operating income increased 42.9% to $1,478 million in Q2, representing a 20.2% operating margin.
GAAP net income attributable to common shareholders decreased 89.0% to $60 million in Q2; Adjusted net income attributable to common shareholders increased 15.2% to $783 million in Q2.
Operating cash flow for Q2 was $895 million, and free cash flow totaled $714 million.
Cash and cash equivalents were $1.517 billion as of June 30, 2026, compared to $1.026 billion as of December 31, 2025.
Total liabilities were $53.973 billion as of June 30, 2026, compared to $29.943 billion as of December 31, 2025.

The company reaffirmed its 2026 constant currency net sales guidance of $25.9–$26.4 billion.
The company expects constant currency Adjusted diluted EPS growth in a low-double-digit range for 2026.
2026 guidance comprises 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 the JDE Peet's acquisition.
Foreign currency translation is forecasted to provide approximately a one percentage point tailwind to 2026 full-year net sales and EPS growth.
The company targets a pro-forma management leverage ratio of approximately 4.1x at year-end 2026.
Management remains on track to achieve 2026 financial and transformation commitments while preparing for a successful separation in early 2027.

U.S. Refreshment Beverages: Net sales increased 10.0% to $2.9 billion in Q2, driven by volume/mix growth of 6.5% and favorable net price realization of 3.5%. Adjusted operating income increased 11.9% to $874 million with a 29.9% margin.
U.S. Coffee: Net sales decreased 3.2% to $918 million in Q2 due to an 8.2% volume/mix decline (including a reporting shift of Peet's K-Cup pods to JDE Peet's), partially offset by 5.0% favorable net price realization. Adjusted operating income decreased 24.7% to $225 million with a 24.5% margin.
JDE Peet's: Net sales were $2.8 billion in Q2. The acquisition closed on April 1, making the segment contribution wholly incremental YoY. Adjusted operating income was $414 million with a 14.8% margin.
KDP International: Net sales increased 19.6% to $664 million in Q2; on a constant currency basis, sales grew 12.4% driven by 6.5% volume/mix growth and 5.9% favorable net price realization. Adjusted operating income was flat YoY at $155 million with a 23.3% margin.

The company holds leadership positions in North American refreshment beverages across carbonated soft drinks, water, juice, and mixers with brands including Dr Pepper, Canada Dry, Mott's, A&W, Peñafiel, GHOST, 7UP, Snapple, Clamato, and Core Hydration.
The global coffee business spans over 100 markets, featuring the Keurig single-serve brewing system and brands such as Peet's, L'OR, and Jacobs.
The company faces inflationary pressures and higher SG&A expenses, including increased marketing, which impacted margins.
KDP International faced cost pressures including the Mexico beverage tax.

Risks include global economic uncertainty, tariffs, trade wars, geopolitical disturbances, and sanctions.
Significant risks relate to the completion of the separation of beverage and coffee portfolios, the incurrence of significant debt to fund the JDE Peet's acquisition, and the ability to successfully integrate JDE Peet's.
Potential credit rating downgrades, negative impacts on business relationships, and significant separation costs are cited as risks.
Risks include the inability to predict the amount and timing of non-cash gains or losses from mark-to-market adjustments of derivative instruments.

CEO Tim Cofer stated the company delivered "another strong quarter of results" with Q2 EPS exceeding expectations.
Management highlighted double-digit top- and bottom-line growth in U.S. Refreshment Beverages, sequential improvement in KDP International, and solid performance from the combined coffee platform.
Management noted meaningful progress on integration and separation work, including capturing initial cost synergies, advancing organizational readiness milestones, and generating robust free cash flow for balance sheet deleveraging.
The tone was confident regarding the ability to achieve 2026 commitments and prepare for the early 2027 separation.

The JDE Peet's acquisition closed on April 1, 2026, contributing wholly incremental sales and results to the second quarter.
The company issued $4,395 million in net proceeds from convertible preferred stock and $3,899 million from the sale of a non-controlling interest in the first six months of 2026.
Cash dividends paid to common shareholders were $624 million in the first six months of 2026, and $54 million to preferred shareholders.
The company incurred significant acquisition, integration, and financing costs associated with the JDE Peet's acquisition and the subsequent spin of Global Coffee Co., which impacted GAAP results but were excluded from Adjusted metrics.
The company targets a pro-forma management leverage ratio of 4.1x at year-end 2026.