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…
Earnings analysis · 10-Q
KDP earnings analysis
Filed August 10, 2026 · Our reading of the company's report
The latest report
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…
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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.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.04
What stood out
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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.
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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%.
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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.
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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.
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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.
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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.
What to watch
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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.
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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.
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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.
Management's outlook
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.
Earlier filings 4
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 itself. Analysis can contain errors; check the source document for full context.