How does KDP's revenue cost management compare year-over-year?

Keurig Dr Pepper (KDP) demonstrates improved revenue and cost management year-over-year, with notable gains in sales, volume, and price realization, despite inflationary pressures and foreign exchange headwinds.

1. Revenue Growth: KDP's total revenue for 2024 was $15.35 billion, marking a 3.6% increase from the previous year. This growth was driven by a 5.2% year-over-year increase in sales in the fourth quarter, reaching $4.07 billion, surpassing analyst estimates.
2. Cost Management: The Cost of Goods Sold (COGS) for KDP in 2024 was $6.82 billion. While the adjusted gross margin fell by 120 basis points to 56.3%, the company's adjusted operating income rose by 3.4% to $1.13 billion, reflecting effective cost management.
3. Operating Income and Profitability: KDP's adjusted operating income grew by 3.4% year-over-year, reaching $1.13 billion, with an operating margin of 27.7% in Q4 2024. Despite inflationary pressures and a decline in international segment operating income, the company's strategic initiatives and productivity savings have supported profitability.
4. Cash Flow and Free Cash Flow: KDP experienced a significant increase in free cash flow by 380.4% in Q4 2024, reaching $687 million, driven by strong operating cash flow growth. This robust cash generation capacity supports the company's strategic investments, including the acquisition of GHOST.
5. Segmental Performance: The U.S. Refreshment Beverages segment contributed significantly to KDP's growth, with a 10.3% increase in net sales in Q4 2024, reaching $2.4 billion. In contrast, the U.S. Coffee segment experienced a 2.4% decline in net sales, totaling $1.1 billion, partly offset by volume/mix improvements.
6. Strategic Outlook: KDP anticipates mid-single-digit net sales growth and high-single-digit adjusted EPS growth in 2025, despite a foreign currency headwind. The company's focus on innovation, brand building, and strategic acquisitions, such as GHOST, positions it for continued growth and market expansion.

In conclusion, Keurig Dr Pepper has shown effective revenue cost management, achieving revenue growth while maintaining profitability, despite sector-specific challenges. The company's strategic responses to market dynamics and its focus on innovation and operational efficiency underscore its positive outlook for future growth.