Keurig Dr Pepper (DP5) Q3 2026 Earnings Report

The call was predominantly positive. KDP reported strong consolidated sales, operating income, EPS, US Refreshment Beverages momentum, energy and hydration gains, healthy cash flow, improving leverage, progress on JDE Peet's integration, and continued separation execution. The main challenges were weaker-than-expected US single-serve coffee trends, a more gradual US Coffee profit recovery, lower legacy KDP EPS guidance, margin and cost pressures, and modestly lower JDE Peet's sales expectations. The highlights significantly outweighed the lowlights.

For the full year, KDP continues to expect total company net sales in a $25.9 billion to $26.4 billion range, including an approximately $8.3 to $8.4 billion contribution from JDE Peet's; low double-digit constant currency EPS growth, including an anticipated 7 to 8 percentage points contribution from the JDE Peet's acquisition; legacy KDP EPS growth of 3% to 5%; an approximately 0.5 percentage point FX tailwind to total company net sales and EPS growth; interest expense of approximately $1.09 to $1.11 billion; an effective tax rate of approximately 22% to 23%; approximately 1.37 billion diluted weighted average shares outstanding; approximately $190 million in pretax coffee JV cost and convertible preferred P&L cost; and approximately $2.5 billion in free cash flow. For Q4, KDP expects continued sequential improvement and year over year growth in underlying US Coffee profitability, at a more gradual pace than prior expectations, JDE Peet's drivers to persist with the price-cost benefit moderating from Q3 levels, an improved trend in KDP International, and continued momentum in US Refreshment beverage; the planned separation remains on track for early 27, with exact timing subject to market conditions among other factors.