Keurig Dr Pepper posts 9.4% Q1 sales growth to US$4B as beverage demand offsets coffee weakness
Keurig Dr Pepper posts strong Q1 growth driven by beverages, while coffee segment faces headwinds from weaker demand and rising costs.
USA – Keurig Dr Pepper has reported a 9.4% increase in first-quarter net sales to US$4 billion, supported by strong demand across its beverage portfolio, even as its coffee segment faced ongoing challenges.
The company recorded approximately 12% growth in its U.S. beverage division, driven by price increases and robust demand for core brands such as Dr Pepper, Snapple and 7UP. Additional gains were supported by energy drink brand Ghost and partner brand Electrolit.
The strong performance in beverages helped offset weaker results in the company’s coffee business, where declining at-home consumption, retailer inventory reductions and higher input costs weighed on overall performance.
Keurig Dr Pepper reported a decline in gross margin to 52.8%, compared to 54.6% in the same period last year, reflecting cost pressures across its operations.
Commenting on the results, CEO Tim Cofer said: “The year is off to a good start. We delivered a solid first quarter, with strong momentum in our cold beverage portfolio and coffee results that tracked with our expectations, even as we navigated elevated costs.”
He added: “Earlier this month, we also completed our acquisition of JDE Peet’s, achieving a significant milestone in our transformation agenda and uniting our complementary organisations under a shared vision for global coffee leadership.”
In the United States, coffee net sales declined 2.3% to US$857 million during the quarter. Volume and mix fell by 8.2%, which the company said “more than offset” favourable net price realisation of 5.9%.
Operating performance also weakened, with GAAP operating income decreasing 20.8% to US$160 million, while adjusted operating income declined 21.3% to US$199 million, representing 23.2% of net sales.
Keurig Dr Pepper attributed the decline in adjusted operating income to ongoing cost pressures, lower volumes and increased marketing expenditure, although these were partially offset by pricing actions and productivity improvements.
Executives noted that the company has indirect exposure to higher packaging, fuel and freight costs linked to the Middle East conflict but remains largely hedged for 2026. They added that further actions could be taken to protect margins if cost pressures persist.
Looking ahead, Cofer said: “With well-constructed plans in place, high-quality execution, and improving cost visibility as the year unfolds, we remain confident in our ability to deliver on our commitments while standing up two pure-play companies positioned for success.”
The company expects full-year 2026 net sales to range between US$25.9 billion and US$26.4 billion, with adjusted earnings per share projected to grow in the low double-digit range.
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