KDP earnings analysis
What we found in KDP's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
KDP reported strong acquisition-driven revenue growth, with second-quarter sales up 75.6% to $7,309 million, but profitability deteriorated sharply: gross margin declined 1,230 basis points to 41.9%, operating margin declined 1,300 basis points to 8.6%, and diluted EPS fell to $0.04 from $0.40. U.S. Refreshment Beverages and KDP International grew, while U.S. Coffee declined and JDE Peet's recorded a $62 million operating loss. Operating cash flow improved to $1,176 million for the first six months, but the $17.4 billion acquisition materially increased debt, financing costs, integration risk, and geopolitical exposure.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue surged on JDE Peet's acquisition
- Net sales rose 75.6% year over year to $7,309 million, with volume/mix contributing 70.4%, net price realization 4.2%, and FX 1.0%. The increase was largely acquisition-driven, as JDE Peet's contributed 67.3% of volume/mix growth.
- Refreshment beverages remained strong
- U.S. Refreshment Beverages delivered 10.0% revenue growth to $2,925 million and 14.9% operating-income growth to $857 million. Its operating margin expanded 130 basis points to 29.3%.
- International growth accelerated
- KDP International revenue increased 19.6% to $664 million and operating income increased 6.3% to $152 million, supported by 7.2% FX growth, 5.9% net price realization, and 6.5% volume/mix growth.
- Operating cash flow improved
- Operating cash flow for the first six months increased to $1,176 million from $640 million, a $536 million improvement attributed to a favorable working-capital comparison.
- Manufacturing investment increased
- Capital expenditures were $297 million in the first six months, plus $207 million of capital expenditures included in accounts payable and accrued expenses, primarily for manufacturing investments.
- Global coffee platform expanded
- The company completed the JDE Peet's acquisition for approximately $17.4 billion in cash and acquired 97.75% of its ordinary shares, creating a four-segment operating structure.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Acquisition and input costs compressed margins
- Gross margin fell to 41.9% from 54.2%, down 1,230 basis points, while operating margin fell to 8.6% from 21.6%, down 1,300 basis points. The filing cites a $314 million JDE Peet's inventory step-up, higher integration costs, tariffs, and other input-cost pressures.
- Leverage and financing costs increased
- Net interest expense increased 86.7% to $336 million in the quarter, and the company raised $3.6 billion through a delayed-draw term loan, approximately $6 billion through senior unsecured notes, and $4.5 billion through convertible preferred stock. Moody's and S&P downgraded the company's ratings on March 10, 2026, although they remain investment grade.
- JDE Peet's and Separation execution risk
- The newly acquired JDE Peet's business exposes KDP to Russia-related geopolitical and operating risks; Russian operations represented approximately 6% of JDE Peet's consolidated revenue in both 2025 and 2024. The filing also states that the planned Separation is expected in early 2027 and may involve significant additional costs and execution risk.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.04
- Gross margin
- 41.9%
- Operating margin
- 8.6%
- Segment
- U.S. Refreshment Beverages: revenue $2,925 million, up 10.0%; operating income $857 million, up 14.9%.
- Segment
- U.S. Coffee: revenue $918 million, down 3.2%; operating income $149 million, down 36.1%.
- Segment
- KDP International: revenue $664 million, up 19.6%; operating income $152 million, up 6.3%.
- Segment
- JDE Peet's: revenue $2,802 million; operating loss $62 million, including a $314 million inventory step-up impact.
What they said about what is next.
The 10-Q does not provide new quantitative revenue or EPS guidance. Management states that the planned Separation is expected to occur in early 2027, subject to market and other conditions; prior outlook was disclosed in the earlier earnings release.
The filing reads worse than the one before it.
What came before.
- 10-Q · April 23, 2026
- Keurig Dr Pepper reported Q1 2026 net sales of $3,976 million (up 9.4% YoY) but GAAP diluted EPS declined to $0.20 (down 47.4% YoY) as acquisition-, integration- and financing-related costs and higher interest expense…
- 10-K · February 24, 2026
- Keurig Dr Pepper reported solid 2025 results with net sales of $16,603 million (up 8.2% vs 2024) and diluted EPS of $1.53 (up 45.7% vs 2024), driven by strength in U.S. Refreshment Beverages and favorable comparisons to…
- 10-Q · April 25, 2024
- Keurig Dr Pepper reported first quarter net sales of $3,468 million, up $115 million (3.4%) year-over-year, driven by price realization and FX. Gross margin expanded to 55.9% (+390 bps) and operating margin rose to…
- 10-K · February 22, 2024
- Keurig Dr Pepper (KDP) reported 2023 net sales of $14,814 million (up 5.4% vs. 2022) with gross margin expanding to 54.5% and operating margin to 21.5%, driving diluted EPS to $1.55 (2023 vs. $1.01 in 2022). Results…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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