Keurig Dr Pepper Beats Q3 Estimates but Warns of Slower Coffee Profits Ahead

Keurig Dr Pepper reported third-quarter adjusted earnings of 66 cents per share, beating analyst estimates of 62-63 cents, on net sales of $7.34 billion that also edged past the $7.33 billion consensus. GAAP net income attributable to common shareholders rose 22.4% to $810 million, or 59 cents per diluted share, compared with $662 million, or 49 cents, a year earlier. Adjusted operating income came in at $1.7 billion, well above the $1.57 billion estimate.

The US refreshment beverage segment drove the quarter, with volumes rising 7.2% and prices up 3.7% from a year earlier. However, gross margin contracted sharply to 48% from 54.3% a year ago, a pressure point that weighed on investor sentiment even as the headline numbers beat.

Despite the earnings beat, shares fell roughly 4.3% in premarket trading after the company flagged slower fourth-quarter coffee profits, citing shoppers trading down to cheaper options. The company reaffirmed its full-year 2026 net sales guidance of $25.9 billion to $26.4 billion, in line with the $26.31 billion analyst estimate, and reiterated its adjusted earnings outlook. KDP also noted plans for an early 2027 business separation.