Keurig Dr Pepper $DPS reported first-quarter net sales of $3.98 billion, up 9.4% from a year earlier, beating analyst estimates. Both figures cleared Wall Street targets, with Reuters noting that LSEG consensus had put net sales at $3.84 billion and adjusted earnings at $0.37 per share.
The company's U.S. Refreshment Beverages segment drove the quarter, with net sales rising 11.9% to $2.6 billion. Volume and product mix grew 7.2%, and net price realization added 4.7%. Adjusted operating income for the segment climbed 9.8% to $742 million, the company said.
Coffee was a weak point. Net sales in the U.S. Coffee segment fell 2.3% to $857 million, with volume and mix declining 8.2%. Adjusted operating income in that segment dropped 21.3% to $199 million, weighed down by cost pressures, reduced volume, and higher marketing spending, Keurig Dr Pepper said.
On a gross basis, margins tightened year over year, slipping to 52.8% from the 54.6% recorded in the same period of 2025. Adjusted operating income for the company fell 1.9% to $838 million, with inflationary pressures and higher selling, general, and administrative expenses offsetting net sales growth and productivity savings.
GAAP net income fell 47.8% to $270 million, or $0.20 per diluted share, reflecting transaction and acquisition-related costs tied to the company's takeover of JDE Peet's, the Dutch coffee and tea group. The deal closed on April 1, Keurig Dr Pepper said.
"The year is off to a good start," CEO Tim Cofer said in a statement. "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."
The company reaffirmed its full-year 2026 guidance, projecting net sales of $25.9 billion to $26.4 billion and low-double-digit constant currency adjusted EPS growth. That outlook includes 4-6% constant currency net sales growth from its existing business, plus an incremental contribution from JDE Peet's.
Following the release, Reuters reported the stock had gained roughly 5% in premarket trading.