Keurig Dr Pepper (KDP) Down 12.5% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Keurig Dr Pepper, Inc (KDP). Shares have lost about 12.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Keurig Dr Pepper due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Keurig Dr Pepper, Inc before we dive into how investors and analysts have reacted as of late.

KDP Q4 Earnings & Revenues Beat Estimates, Sales Increase 10.5%

Keurig Dr Pepper reported fourth-quarter 2025 results, wherein both the top and bottom lines beat the Zacks Consensus Estimate and improved year over year.

The company’s fourth-quarter performance was driven by strong growth in U.S. Refreshment Beverages and continued sequential improvement in U.S. Coffee. Innovation-led execution and effective go-to-market strategies fueled market share gains across core categories, while sustained sales momentum and disciplined cost actions to offset inflation supported solid earnings and healthy free cash flow generation.

KDP continues to focus on strengthening its core operations while laying the groundwork for its next phase of transformation. This process begins with the acquisition and integration of JDE Peet’s and culminates in the planned separation into two focused, pure-play businesses.

KDP’s Q4 Performance

Net sales of $4.5 billion increased 10.5% year over year on a reported basis and surpassed the Zacks Consensus Estimate of $4.36 billion. On a constant currency basis, net sales increased 9.9%, driven by a 3.9% gain in volume/mix and a 6% benefit from favorable net pricing. The acquisition of GHOST contributed 3.6 percentage points to the volume/mix growth.

Adjusted earnings per share (EPS) of 60 cents grew 1.7% year over year and surpassed the consensus estimate by a penny. The bottom-line improvement was driven by higher adjusted operating income and gains, somewhat offset by a slightly higher tax rate and increased interest expense.

The adjusted gross profit rose 7.7% year over year to $2.47 billion, while the adjusted gross margin fell 140 basis points (bps) to 54.9%.

The adjusted operating income rose 4.8% year over year to $1.19 billion, driven by higher net sales and productivity savings, partially offset by inflationary pressures and higher SG&A costs. Meanwhile, the adjusted operating margin declined 120 basis points year over year to 26.5% in the quarter under review.

A Look at KDP's Segmental Details in Q4

Net sales in the U.S. Refreshment Beverages segment increased 11.5% year over year to $2.7 billion, driven by a 7% rise in volume/mix and a 4.5% benefit from favorable net pricing. Segment growth was supported by market share gains in carbonated soft drinks, energy drinks and sports hydration. The acquisition of GHOST contributed 6.2 percentage points to the volume/mix growth.

Adjusted operating income rose 8.7% year over year to $841 million, representing 30.9% of net sales. This growth was driven by higher net sales and productivity savings, partially offset by inflationary pressures and higher SG&A costs.

Net sales in the U.S. Coffee segment increased 3.9% year over year to $1.2 million, reflecting an 8% benefit from favorable net pricing, partially offset by a 4.1% decline in volume/mix. The increase in net sales was primarily driven by a K-Cup sales increase, while lower pod and brewer shipments weighed on performance.

Adjusted operating income fell 8.8% year over year to $364 million, or 31% of net sales. The decline was caused by the impact of inflationary pressures and a decrease in volume/mix, partially offset by net price realization and productivity savings.

Net sales in the International segment increased 21% year over year to $604 million. On a constant currency basis, net sales grew 16%, reflecting a 9.2% benefit from favorable net pricing and a 6.8% increase in volume/mix. Growth was led by strong performance in key categories, including mineral water in Mexico and single-serve coffee in Canada.

Adjusted operating income increased 20% to $163 million, representing 27% of net sales. This growth was driven by higher net sales and productivity savings, partially offset by inflationary pressures.

Financial Health of Keurig

As of Dec. 31, 2025, Keurig’s cash and cash equivalents were $1,026 million. The company had long-term obligations of $13.03 billion and total stockholders’ equity of $25.5 billion.Net cash provided by operating activities totaled $1.99 billion in fiscal 2025, with the free cash flow amounting to $1.52 billion.

KDP’s 2026 Outlook

For 2026, the company now expects 2026 constant currency net sales in the range of $25.9-$26.4 billion.The outlook for adjusted EPS growth is expected in the low-double-digit range. This outlook assumes that KDP’s core business will deliver 4-6% growth in both net sales and adjusted earnings, measured at constant currency. The forecast also includes added earnings from the JDE Peet’s acquisition, assuming the deal closes in early April. Based on current exchange rates, foreign currency movements are expected to add about one percentage point to both sales and earnings growth in 2026.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

The consensus estimate has shifted -12.36% due to these changes.

VGM Scores

Currently, Keurig Dr Pepper has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a score of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Keurig Dr Pepper has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

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