Keurig Dr Pepper (KDP) Q3 2026 earnings summary

Executive summary

• Q3 net sales rose 70.6% to $7.344B, including JDE Peet’s; legacy sales grew 8.6% on 6.5 points of volume/mix and 2.1 points of pricing.

• Adjusted diluted EPS increased 22.2% to $0.66; GAAP diluted EPS was $0.59. Q3 free cash flow was $1.01B.

• JDE Peet’s performed ahead of expectations; Refreshment Beverages sustained strong growth while softer U.S. Coffee trends informed revised legacy EPS guidance.

• FY2026 guidance was reaffirmed, with low-double-digit constant-currency adjusted EPS growth; separation of beverage and coffee portfolios remains planned for early 2027, subject to market conditions.

Financial highlights

• Adjusted operating income rose 52.5% to $1.670B in constant currency, or 53.1% including currency; adjusted operating margin was 22.7%.

• GAAP operating income increased 34.0% to $1.333B; GAAP net income was $952M, while net income attributable to common shareholders was $810M after preferred allocations.

• Adjusted net income was $986M and adjusted diluted EPS was $0.66; reported net income attributable to common shareholders was $810M and reported diluted EPS was $0.59.

• A $99M tariff refund benefited Q3 operating income by $0.05 per share; a $400M Chobani equity-sale gain contributed to reported results.

• Q3 operating cash flow was $1.04B and free cash flow was $1.01B; nine-month free cash flow was $1.908B.

Outlook and guidance

• FY2026 net sales guidance remains $25.9B–$26.4B, including $8.3B–$8.4B from JDE Peet’s; legacy sales imply mid-to-high-single-digit growth.

• Low-double-digit constant-currency adjusted EPS growth is reaffirmed; JDE Peet’s is expected to contribute 7–8 points, while legacy EPS growth is expected at 3%–5%, down from 4%–6%.

• FX is expected to add 0.5 points to FY sales and EPS growth; interest expense guidance is $1.09B–$1.11B, tax rate 22%–23%, and diluted weighted-average shares ~1.37B.

• FY free cash flow target remains ~$2.5B; Q4 underlying U.S. Coffee profitability is expected to improve sequentially and grow YoY at a more gradual pace.

• Separation remains targeted for early 2027, subject to market conditions; further 2027 outlook is expected early next year.