Keurig Dr Pepper Stock Climbs After Earnings. It Woke Up and Smelled the Coffee.

Keurig Dr Pepper posted better-than-expected net sales in its third quarter, though adjusted earnings were in line with analysts’ forecasts. (Luke Sharrett/Bloomberg)

Key Points

• Keurig Dr Pepper increased its full-year net sales growth forecast to a “high-single-digit range.”
• Third-quarter net sales reached $4.31 billion, exceeding Wall Street’s forecast of $4.15 billion.
• International net sales rose 10.5% to $580 million, and refreshment beverages grew 14.4%.

Shares of Keurig Dr Pepper rose sharply on Monday after the beverage company boosted its full-year sales forecast and reported strong sales across several business segments.

Adjusted third-quarter earnings of 54 cents a share were in line with analysts’ expectations, according to FactSet, while net sales of $4.31 billion topped the $4.15 billion Wall Street had forecast.

The beverage maker raised its growth forecast for full-year net sales to a “high-single-digit range,” up from mid-single-digit growth previously. Keurig Dr Pepper still sees adjusted earnings growth in a high-single-digit range.

The company experienced growth across multiple lines of business. International sales rose 10.5% to $580 million while refreshment beverages continued to see “robust growth,” the company said, pointing to 14.4% growth in the quarter.

Sales within its U.S. coffee segment showed “encouraging sequential progress,” increasing 1.5% to $991 million, largely driven by higher prices, which offset a slight decline in volume. The company noted that growth in the business “reflected K-Cup pricing actions taken to combat inflation” against the backdrop of declining pod and brewer shipments.

Shares gained 7.1% on Monday, putting them on pace for their largest same-day percentage increase since a 22% jump in March 2020, according to Dow Jones Market Data.

The stock was outpacing Coca-Cola and PepsiCo, which made modest moves. The S&P 500 was up 0.9%.

Separately, Keurig Dr Pepper said its pending acquisition of coffee company JDE Peet’s remained on track. The company announced a $7 billion strategic investment co-led by Apollo Global Management and KKR “to reduce projected net leverage at acquisition close” on Monday.

Keurig Dr Pepper unveiled an $18 billion deal to acquire the owner of Peet’s Coffee earlier this year, saying it planned to spin off the resulting combined coffee business. This move would essentially undo the 2018 merger between Keurig and Dr Pepper.

Since the announcement in August, “we have also carefully considered shareholder feedback and are responding with decisive actions,” CEO Tim Cofer added. The deal is expected to close in the first half of 2026.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com