Keurig Dr Pepper Inc. (KDP), Burlington, Mass., and Plano, Texas, reported financial results for the first quarter ended March 31, 2019.
The net sales of $2.5 billion in the first quarter of 2019 declined 1.1 percent, compared with adjusted pro forma net sales of $2.53 billion in the prior year period, reflecting strong underlying net sales growth of 2.5 percent that was more than offset by the expected unfavorable impacts of changes in the company’s allied brands portfolio, as well as calendar timing, the company says.
Commenting on the quarter, KDP Chairman and Chief Executive Officer Bob Gamgort stated: “Our first quarter results represent a good start to the year, with strong EPS delivery and all four segments registering underlying net sales growth. In addition, our in-market performance was also solid, as we grew retail dollar consumption across the majority of our portfolio and held or grew market share in nearly all categories. Our cash flow generation remains strong and we continue to reduce debt in line with our deleveraging targets. We remain confident in our targets for 2019 and our long-term value creation framework.”
Retail market performance remained strong in the first quarter, with dollar consumption growth registered across the majority of the company’s portfolio and KDP holding or growing market share in the vast majority of its categories, the company says, based on KDP’s custom IRI category definitions. The company’s CSD, premium unflavored still water, ready-to-drink (RTD) coffee and shelf stable apple juice portfolios registered market share growth in the quarter, driven by strong performances of Dr Pepper and Canada Dry CSD’s, CORE waters, Peet’s and Forto RTD coffees, and Mott’s apple juice, it adds. In coffee, retail consumption of single-serve pods manufactured by KDP increased essentially in line with category unit growth of 5 percent.
Net sales for the Coffee Systems division in the first quarter of 2019 increased 2.1 percent to $968 million, compared to $948 million in the year-ago period. The volume/mix growth of 5 percent for Coffee Systems was driven by a 7 percent increase in K-Cup pod volume and a 12.4 percent increase in brewer volume, partially offset by lower pod sales mix, primarily reflecting the impact of significant volume growth of branded partners in the first quarter of 2019.
Net sales for the Packaged Beverage division the first quarter of 2019 decreased 5.3 percent to $1.12 billion, compared with adjusted pro forma net sales of $1.18 billion in the year-ago period, reflecting underlying net sales growth of 1.4 percent, driven by higher net price realization of 2.3 percent, partially offset by lower volume/mix of 0.9 percent. BI