Keurig Dr Pepper reported strong third-quarter growth and reaffirmed its 2026 financial guidance, while continuing work toward a planned separation into two companies. The quarter’s reported sales growth was heavily boosted by its JDE Peet’s acquisition; excluding that contribution, the legacy business also posted solid growth.
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Sales rose sharply, led by the acquisition. Third-quarter net sales increased 70.6% to $7.34 billion. Excluding JDE Peet’s, sales at KDP’s legacy businesses grew 8.6%, reflecting 6.5% growth in volume and product mix and 2.1% from higher net pricing. Year-to-date sales were $18.63 billion, up 53.9%.
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Adjusted earnings advanced more quickly than reported operating income. Adjusted operating income rose 52.5% to $1.7 billion, equal to 22.7% of sales. Growth reflected higher sales and productivity savings, partly offset by inflation, higher selling and administrative costs, and increased marketing. GAAP operating income increased 34.0% to $1.3 billion; acquisition and integration costs were among the items weighing on the comparison.
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A tariff refund boosted operating income. Both GAAP and adjusted operating income included a $99 million benefit from tariff refunds during the quarter.
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Quarterly diluted EPS increased about 20%. GAAP earnings per diluted share were 59 cents, up 20.4%, while adjusted diluted EPS was 66 cents, up 22.2%. GAAP net income attributable to common shareholders rose 22.4% to $810 million; adjusted net income increased 22.1% to $905 million. Higher non-operating and interest expenses, non-controlling interests and earnings allocated to preferred investors partly offset the operating improvement.
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Year-to-date EPS trends differ depending on the measure. GAAP diluted EPS was 85 cents, down 33.1% from the prior-year period, while adjusted diluted EPS was $1.65, up 13.1%. The company’s adjusted measures exclude items affecting comparability.
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Cash generation was strong in the quarter. Operating cash flow was $1.04 billion and free cash flow was $1.01 billion.
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Management reiterated its 2026 outlook. The announcement reaffirmed full-year guidance but did not include the specific guidance figures in the material provided here.
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The planned separation remains a stated priority. CEO Tim Cofer said KDP is continuing to work through the milestones needed for the planned separation and is investing in brands and capabilities to prepare its two future companies.
What changes for investors: The quarter’s headline sales growth reflects both the JDE Peet’s contribution and underlying growth in KDP’s legacy businesses. Adjusted earnings growth was stronger than GAAP operating-income growth, while the reported quarter also benefited from the tariff refund.