Keurig Dr Pepper (KDP) Q2 2026 earnings summary

Executive summary

• Q2 2026 net sales surged 75.6% year-over-year to $7.31 billion, driven by the JDE Peet's acquisition and strong U.S. Refreshment Beverages performance.

• Adjusted diluted EPS rose 16.3% to $0.57, while GAAP diluted EPS dropped 90% to $0.04 due to acquisition and integration costs.

• The company reaffirmed its 2026 constant currency net sales and adjusted EPS outlook, targeting a pro-forma management leverage ratio of 4.1x at year-end.

• Successfully closed the JDE Peet's acquisition in April 2026, rapidly advancing integration, capturing initial cost synergies, and progressing on separation milestones.

• Maintained disciplined execution and confidence in delivering full-year guidance despite a dynamic external environment.

Financial highlights

• Consolidated net sales grew 75.6% year-over-year to $7.31 billion, driven by the JDE Peet's acquisition; legacy sales rose 7.3%.

• Adjusted operating income increased 42.9% to $1,478 million (20.2% margin); GAAP operating income declined 30.1% to $628 million due to higher SG&A and integration costs.

• Adjusted net income attributable to common shareholders grew 15.2% to $783 million; GAAP net income attributable to common shareholders fell 89% to $60 million.

• Free cash flow reached $714 million in Q2, with a full-year target of ~$2.5 billion.

• Gross margin was 46.5% (adjusted) and 41.9% (GAAP), both down year-over-year due to portfolio mix and integration costs.

Outlook and guidance

• Reaffirmed full-year net sales guidance of $25.9–$26.4 billion, including $8.5–$8.7 billion from JDE Peet's.

• Legacy business expected to grow 4–6% in constant currency, likely at the high end of the range.

• Low double-digit constant currency adjusted EPS growth expected, with 6–7 percentage points from JDE Peet's.

• FX expected to provide a 1% tailwind to net sales and EPS.

• Guidance incorporates a 2% non-cash EPS headwind from higher depreciation and a one-time cash benefit from tariff refunds, netting to a neutral EPS impact.