Keurig Dr Pepper exceeds consensus in third quarter, sees slower-than-expected coffee growth in Q4 2026. The company reaffirmed its annual forecasts for the third time this year. For 2026, KDP therefore continues to forecast net revenue of between $25.9 and $26.4 billion. However, the company lowered its fiscal 2026 sales target for JDE Peet's to $8.3 billion-$8.4 billion from the prior range of $8.5 billion-$8.7 billion November 4, 2026 November 3, 2026 MILAN - Keurig Dr Pepper 's (KDP) quarterly results, released yesterday, Tuesday 3 November, showed profits and sales exceeding forecasts. The US beverage giant - which is set to split into two separate entities in early 2027 - recorded a 21.1 per cent increase in net profit, to $905 million. Earnings per share stood at 66 cents, compared with the consensus estimate of 62 cents. As a result of the acquisition of Jde Peet's, quarterly net sales soared by 70.6 per cent to $7.34 billion, exceeding analysts' expectations of a 70.2 per cent increase to $7.33 billion. Adjusted operating income increased 11.4% to $353 million and totalled 34.7% of net sales, with an AOI margin of 34.7 per cent, again exceeding the consensus estimate of 311 million. The company reaffirmed its annual forecasts for the third time this year. For 2026, KDP therefore continues to forecast net revenue of between $25.9 and $26.4 billion. However, the company lowered its fiscal 2026 sales target for JDE Peet's to $8.3 billion-$8.4 billion from the prior range of $8.5 billion-$8.7 billion. "We are seeing heightened value sensitivity in at-home coffee, particularly among the low- and middle-income consumers," said CEO Tim Cofer during a post-earnings call quoted by Reuters, adding that US coffee profitability would grow at a more gradual pace than previously expected in the fourth quarter. Keurig Dr Pepper's coffee unit is at the centre of a major strategic reorganisation, which involves its spin-off into an independent, US-listed company called Global Coffee Co. (alongside Beverage Co. for the beverage segment), to be headed by Russ Torres, former president and chief operating officer of Kimberly-Clark. It is estimated that the company will have annual sales of around 16 billion, making it the number two player in the global coffee market, behind only Nestlé. Below are the key points from the statement released by the company. Third quarter consolidated results. Net sales for the third quarter increased 70.6% to $7.3 billion and, on a constant currency basis, net sales advanced 70.1%. Excluding the contribution from the JDE Peet's acquisition, legacy KDP net sales increased 8.6%, driven by volume/mix growth of 6.5% and favorable net price realization of 2.1%. GAAP operating income increased 34.0% to $1.3 billion, including an unfavorable year-over-year impact of items affecting comparability, primarily due to acquisition and integration-related costs. Adjusted operating income increased 52.5% to $1.7 billion and totaled 22.7% of net sales. The Adjusted operating income growth was driven by net sales growth and productivity savings, partially offset by the impact of inflationary pressures and higher SG&A expenses, including increased marketing. GAAP and Adjusted operating income also included a $99 million benefit from tariff refunds in the quarter. GAAP net income attributable to common shareholders increased 22.4% to $810 million, or $0.59 per diluted share, including an unfavorable year-over-year impact of items affecting comparability. Adjusted net income attributable to common shareholders increased 22.1% to $905 million and Adjusted diluted EPS increased 22.2% to $0.66. GAAP and Adjusted EPS growth were driven by the operating income increase, partly offset by higher non-operating expense, interest expense, non-controlling interest, and earnings allocated to preferred investors. Operating cash flow for the third quarter was $1.04 billion and free cash flow totaled $1.01 billion. Third quarter segment results. U.S. Refreshment Beverages Net sales for the third quarter increased 10.9% to $3.0 billion, driven by volume/mix growth of 7.2% and favorable net price realization of 3.7%. GAAP operating income increased 2.2% to $820 million, including an unfavorable year-over-year impact of items affecting comparability. Adjusted operating income increased 8.3% to $884 million and totaled 29.1% of net sales. Adjusted operating income growth was driven by net sales growth and productivity savings, partially offset by the impact of inflationary pressures and higher SG&A expenses, including increased marketing. U.S. Coffee Net sales for the third quarter increased 2.7% to $1.0 billion. Volume/mix growth of 6.9% was partially offset by unfavorable net price realization of 4.2%. GAAP operating income increased 34.6% to $319 million, including a favorable year-over-year impact of items affecting comparability. Adjusted operating income increased 11.4% to $353 million and totaled 34.7% of net sales. The Adjusted operating income growth was primarily driven by the benefit from tariff refunds, as well as volume/mix growth, productivity savings, and cost synergies. These factors more than offset unfavorable net price realization, the impact of inflationary pressures, and increased marketing. JDE Peet's Net sales for the third quarter were $2.6 billion. GAAP operating income was $289 million, including an unfavorable impact of items affecting comparability, primarily due to acquisition and integration-related costs. Adjusted operating income was $480 million and totaled 18.1% of net sales. The JDE Peet's acquisition closed on April 1, and therefore the segment contribution was wholly incremental to the Company on a year-over-year basis. KDP International Net sales for the third quarter increased 11.0% to $644 million. On a constant currency basis, net sales increased 7.6%, driven by favorable net price realization of 5.7% and volume/mix growth of 1.9%. GAAP operating income increased 3.3% to $158 million, including a favorable year-over-year impact from currency translation. Adjusted operating income declined 0.6% to $160 million and totaled 24.8% of net sales. The Adjusted operating income decline was driven by cost pressures, including the Mexico beverage tax, and increased marketing, which offset net sales growth and productivity savings. 2026 Guidance The 2026 guidance provided below is presented on a constant currency, non-GAAP basis. The Company does not provide reconciliations of such forward-looking non-GAAP measures to GAAP measures, due to the inability to predict the amount and timing of impacts outside of the Company's control on certain items, such as non-cash gains or losses resulting from mark-to-market adjustments of derivative instruments, among others, which could be material. Reconciling such items would require unreasonable efforts. For 2026, KDP expects net sales of $25.9-$26.4 billion and constant currency Adjusted diluted EPS growth in a low-double-digit range. This guidance now includes approximately $8.3-$8.4 billion in net sales and a 7 to 8 percentage point EPS growth contribution from the JDE Peet's acquisition, as well as 3-5% constant currency EPS growth for KDP's legacy business, due to revised expectations for U.S. Coffee. At current exchange rates, foreign currency translation is forecasted to approximate a one half of one percentage point tailwind to 2026 full year net sales and EPS growth.

Keurig Dr Pepper boosted in Q3 by JDE Peet's coffee profitability. Keurig Dr Pepper recorded third-quarter earnings that beat an analyst estimate and revenues in line with expectations, as the company began to see a contribution from its April acquisition of the JDE Peet's coffee business. Keurig Dr Pepper's net income in the quarter was $810 million, or 59 cents per diluted share, versus $662 million, or 49 cents per diluted share, in the year-before quarter. Adjusted for one-time events, net income was 66 cents per diluted share versus 54 cents per diluted share in the period a year previous, the company reported. A Zacks Investment Research analyst consensus estimate had earnings per adjusted diluted share at 63 cents and revenues at $7.36 billion. Net sales were $7.34 billion versus $4.31 billion in the year-prior quarter. Operating income was $1.33 billion versus $995 million in the year-earlier period, while adjusted operating income was $1.67 billion versus $1.09 billion, the company stated. In segment results, net sales at U.S. Refreshment Beverages increased 10.9% to $3.03 billion. Operating income increased 2.2% to $820 million, while adjusted operating income increased 8.3% to $884 million. U.S. Coffee net sales increased 2.7% to $1.02 billion. Operating income in the coffee segment ncreased 34.6% to $319 million, while adjusted operating income increased 11.4% to $353 million. The contribution from the JDE Peet's operation, which Keurig Dr Pepper acquired in April, included third-quarter net sales of $2.6 billion, with operating income at $289 million and adjusted operating income at $480 million. Keurig Dr Pepper reaffirmed its full-year guidance. The previously announced outlook was for net sales of $25.9 billion to $26.4 billion in the current fiscal year, and constant currency adjusted diluted EPS growth in the low-double-digit range In announcing the financial results, CEO Tim Cofer said, "We are pleased with our third quarter results, which featured meaningful net sales and EPS growth, along with healthy free cash flow. Our refreshment beverages portfolio maintained its double-digit sales growth momentum, and we drove solid results in coffee, led by strong JDE Peet's profitability. Notably, we achieved these results while stepping up investment behind our brands and capabilities to position our two future companies for success. As we enter the final stretch of the year, we are on track to deliver our 2026 financial commitments and we remain focused on achieving the remaining milestones to enable our planned separation."

The JM Smucker Company: brewing its way back. Behind every can of Folgers, jar of Jif and frozen Uncrustables sandwich sits a 129-year-old Ohio company that spent three years digesting a $5.4 billion bet on Twinkies. Yet coffee pricing power, a billion-dollar sandwich brand and a fast-shrinking debt load are turning a painful chapter into a cash-generation story. Let's take a closer look. Published on 11/03/2026 at 03:12 am EST MarketScreener.com Founded in 1897 in Orrville, Ohio as an apple butter seller, The J.M. Smucker Company has grown into a packaged-foods leader whose portfolio spans at-home coffee (Folgers, Café Bustelo, Dunkin' retail), pet snacks (Milk-Bone, Meow Mix), and fast-growing frozen sandwich brand Uncrustables. Coffee remains the industry's biggest swing factor and Smucker's largest exposure. Arabica futures neared $4 per pound in October 2025 amid 50% U.S. tariffs on Brazilian coffee, pushing retail ground coffee prices to $9.14 per pound in September, up 41% YoY. Prices have since reversed as Marex and StoneX forecast a record Brazilian crop of roughly 75 million bags in 2026/27, up 15.5%. Arabica fell to about $2.50 per pound by June 2026, its lowest since November 2024, while a Reuters poll projects $2.25 by year-end and an 8.7 million-bag global surplus. For Smucker, cheaper beans should ease costs but also pressure retail pricing. Beyond coffee, growth is concentrated in convenient, protein-rich and functional foods, frozen handhelds, cat food and club stores. Smucker operates across five segments. In 2026, U.S. Retail Coffee, led by Folgers, Café Bustelo and Dunkin' (licensed through 2039), generated $3.30 billion, or 37% of sales. Frozen Handheld and Spreads (Uncrustables, Jif, Smucker's) contributed $1.85 billion (20%), Pet Foods (Meow Mix, Milk-Bone, Pup-Peroni) $1.60 billion (18%), Sweet Baked Snacks (Hostess) $971 million (11%) and Away From Home $879 million (10%). International sales added $442 million. Folgers leads U.S. at-home coffee by volume, Meow Mix leads dry cat food, while Jif, Smucker's and Milk-Bone hold leading positions in their respective categories. Smucker competes with Kraft Heinz (Maxwell House), Keurig Dr Pepper (Green Mountain, McCafé), Nestlé (Starbucks at-home, Nespresso, Hot Pockets, Purina), Hormel (Skippy), Mars, General Mills (Blue Buffalo, Totino's), McKee (Little Debbie) and Grupo Bimbo. Its advantage lies in category-leading brands across coffee, spreads and pet food, its scale as one of the largest U.S. peanut roasters and its ability to raise prices: coffee pricing alone added 22% points to segment sales growth in fiscal 2026. But weaknesses remain. Hostess sales declined 18%, with segment margins falling from 18.6% to 10.0%. Walmart represents 34% of total sales and the top ten customers roughly 60%, while coffee, peanut butter and fruit spreads all recorded volume declines. Growth is increasingly concentrated in a handful of brands. Uncrustables surpassed $1 billion in fiscal 2026 sales, became a top-three freezer aisle brand and reached 2 million additional households. Capacity from the McCalla, Alabama plant and new Fridge Friendly and 12g-protein varieties support management's upgraded high-single-digit growth outlook for fiscal 2027. Café Bustelo moved from eighth to sixth among at-home coffee brands, added 3 million households and is targeting the top four. Folgers is expanding into functional coffee with Protein, Focus, Boost and Prebiotic instant blends launching in November, while Milk-Bone x Jif Peanut Buttery Bites became the strongest dog snack launch in four years. Hostess remains a turnaround, with Smucker closing its Indianapolis plant at a cost of $83.5 million and introducing Banana Bread and Blueberry Donettes. Revenue increased from $8.18 billion in 2024 to $8.73 billion in 2025 (+6.7%), the first full year including Hostess, and $9.05 billion in 2026 (+3.7%, or 5% excluding divestitures). Q1 2027 sales rose 5% to $2.22 billion while management expects full-year sales to decline 1%-2% as coffee pricing reverses, while consensus projects $8.93 billion in 2027, $9.04 billion in 2028 and $9.19 billion in 2029. Adjusted EBITDA rose from $1.88 billion in 2024 (22.9% margin) to $2.11 billion in 2025 (24.2%), before falling to $2.02 billion in 2026 (22.4%) as coffee costs and tariffs compressed adjusted gross margins from 38.2% to 34.9%. Company-defined trailing EBITDA reached $2.30 billion in July 2026, with consensus forecasting $2.18 billion in fiscal 2027 (24.4% margin) and $2.16 billion in 2028. Net income fell from $744 million in 2024 to a $1.23 billion loss in 2025 and a $138.7 million loss in 2026, reflecting $1.98 billion and $962 million in goodwill and trademark impairments, alongside $310 million in 2025 divestiture losses. GAAP ROE dropped from 9.7% to -20.2% and -2.5%, while ROA reached -7.0% and -0.9%. Excluding these charges, fiscal 2026 adjusted ROE stood near 16.8% and ROA at 5.8%, with consensus expecting 19.5% and 6.5% in 2027. Q1 net income recovered to $324.3 million, and analysts project roughly $985 million annually in fiscal 2027 and 2028. Diluted EPS moved from $7.13 in 2024 to -$11.57 in 2025 and -$1.30 in 2026, while adjusted EPS rose from $9.94 to $10.12 before declining 10% to $9.15. Q1 adjusted EPS jumped 71% to $3.24, although $0.84 came from tariff refunds. CapEx declined from $586.5 million in 2024 (7.2% of sales), following construction of the Uncrustables plant, to $393.8 million in 2025 and $317.4 million in 2026 (3.5%), with $325 million planned for 2027. FCF consequently rose from $643 million to $817 million and $1.16 billion, with management guiding for roughly $1.1 billion in 2027 and consensus expecting $1.24 billion in 2028. This cash is helping reverse the $4.3 billion debt increase tied to Hostess. Total debt fell from $7.68 billion in April 2025 to $6.74 billion in July 2026, debt-to-equity improved from 1.26x to 1.17x, and net leverage dropped from 4.3x to 2.9x, reaching the sub-3.0x target ahead of schedule. Another $500 million repayment is planned for fiscal 2027, with interest expense expected to decline from $381 million to roughly $335 million. Smucker has also raised its dividend for 25 consecutive years, from $4.24 per share in 2024 to $4.40 in 2026 and $4.48 annualized today, representing about 42% of guided adjusted EPS, within its 40-45% payout target, and trading at 11.4x trailing adjusted EPS. Coffee remains the biggest risk, accounting for more than a third of sales. Falling bean prices will likely require retail price cuts, with fiscal 2027 guidance already assuming lower pricing and low-single-digit volume declines. Hedging adds volatility, illustrated by the $253 million unallocated derivative loss in the first quarter of fiscal 2026. Tariff uncertainty also persists: roughly $115 million in refunds recognized this year remains subject to a Department of Justice appeal, while guidance assumes no additional duties. These one-time refunds also inflate fiscal 2027 earnings, helping explain why consensus expects almost no profit growth in 2028. Hostess remains the second major risk. Goodwill and intangibles total $10.8 billion, or 67% of assets, leaving room for further impairments if Sweet Baked Snacks continues to weaken after an 8-point decline in volume and mix last quarter. Customer concentration adds pressure, with Walmart accounting for 34% of sales, while private label, weight-loss drugs and tighter ingredient regulations threaten traditional packaged foods. Despite deleveraging, Smucker still carries $6.7 billion in debt, including $1.25 billion maturing in fiscal 2028-2029. Other risks include single-source suppliers for K-Cup pods and Pup-Peroni, a 21% unionized workforce with three contracts expiring in 2027, and ongoing class actions over Folgers serving claims. Smucker's recovery is gaining traction despite the costly Hostess acquisition. Uncrustables, Café Bustelo and pet snacks continue to grow, annual free cash flow exceeds $1 billion, and leverage has fallen below 3x a year ahead of schedule. Still, falling coffee prices, temporary tariff refunds, weak Hostess volumes and retailer concentration remain significant risks. At roughly 11x adjusted earnings with a 3.75% dividend yield, the valuation offers upside if volumes recover and margins stabilize. Fiscal 2028 will be the better test of sustainable earnings growth once the tariff refunds roll off. (C) MarketScreener.com - 2026