KDP - Keurig Dr Pepper sees double-digit growth off higher pricing

Keurig Dr Pepper ( NASDAQ: KDP ) slipped in early trading on Thursday after posting a mixed Q4 earnings report.

The coffee segment saw revenue growth of 12.7% in Q4 to $1.49B. On a constant currency basis, sales were up 13.8%. The constant currency net sales growth was driven by a 10.6% increase in net price realization and a 3.2% increase in volume/mix, including a modest benefit of the 53rd week in 2022. The higher net price realization of 10.6% in the quarter was primarily driven by pricing actions taken in late 2021 and the second quarter of 2022, while the volume/mix increase of 3.2% was due to pod shipment growth of 2.9% and brewer shipment growth of 3.3%.

Sales increased 9.9% to $1.68B in the packaged beverages segment and were up 10.1% on a constant currency basis. The solid performance was driven by higher net price realization of 14.9%, partially offset by a 4.8% decrease in volume/mix, as the segment lapped volume/mix growth of 10.3% in the year-ago period. Broad-based net sales growth across the portfolio was led by CSDs, Mott's, Snapple, Hawaiian Punch, Evian and Polar seltzers.

Sales for the beverage concentrates segment increased 14.3% to $447M and were up 14.8% on a constant currency basis.

Looking ahead, KDP expects mid-single-digit revenue growth as the rate of pricing moderates. The beverage giant also sees enhanced gross margins as the relationship between inflation and pricing improves.

Shares of KDP fell 0.39% premarket to $35.64 vs. the 52-week trading range of $33.35 to $41.31.

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