Keurig Dr Pepper raises 2021 guidance for second time following “strong” Q2

Keurig Dr Pepper (KDP) has reported 9.6% growth in net sales to $3.14 billion for Q2, driven by growth across its business segments.

The company has raised its guidance for 2021 constant currency net sales growth to 6-7% – up from its prior projection of 4-6% growth.

The move marks the second time this year that KDP has raised its full-year outlook, after an “exceptional first quarter” prompted the company to revise its original projection of 3-4% growth.

For the quarter ending 30 June 2021, KDP saw its GAAP operating income increase 31% to $734 million, reflecting factors including the growth in net sales and ‘productivity and merger synergies’.

Both of the beverage giant’s largest units saw overall net sales growth in Q2 – with packaged beverages growing its net sales by 7.6%, while coffee systems recorded a 5.6% increase.

The coffee systems segment saw nearly flat pod volume growth of 0.2%, while brewer volume recorded growth of 29% in the quarter, reflecting continued strong retail consumption.

In packaged beverages, net sales growth was driven by carbonated soft drinks, particularly Canada Dry, Sunkist, Dr Pepper, 7UP, A&W and Squirt, as well as growth in core hydration and other specific brands, partially offset by a decline in Hawaiian Punch.

For the second quarter, both KDP’s Latin America beverages and beverages concentrates divisions recorded strong double-digit net sales growth.

The company’s beverages concentrates business – which saw 21.4% growth in net sales – benefitted from improvements in the fountain foodservice business, as restaurant and hospitality channels begin to recover.

Meanwhile, Latin America beverages grew its net sales by 38.3% driven by strong volume/mix growth of 16.6%, reflecting in part the benefit of marketing investment.

“KDP delivered another strong quarter, as we successfully navigated a challenging macro environment marked by inflation, supply chain disruptions and a tight labour market,” said Keurig Dr Pepper chairman and CEO, Bob Gamgort.

“For the first six months of 2021, we delivered 9% revenue growth and nearly 15% adjusted diluted EPS growth. Notwithstanding the expectation for ongoing challenges to persist for some time, we are confident in our strengthened top-line outlook and plan to reinvest any profit upside back into the business.”