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Keurig Dr Pepper (KDP) is nicely higher after reporting its Q4 results this morning. The beverage giant delivered a modest EPS beat, a fairly typical outcome for the company, while revenue increased 10.6% yr/yr to $4.5 bln, nicely above expectations and marking its second consecutive quarter of double-digit growth. It also issued FY26 guidance, calling for revenue of $25.9-26.4 bln and low double-digit EPS growth, including the expected contribution from JDE Peet's, which is on track to close in early April.

• U.S. Refreshment Beverages was a standout, with sales increasing 11.5% to $2.7 bln, driven by 7% of volume/mix growth and 4.5% of favorable pricing; GHOST contributed 6.1% of the volume/mix growth.
• USRB adj. operating income increased 8.7% to $622 mln, as double-digit sales growth and productivity savings more than offset inflation, and higher SG&A.
• Core CSD trends remained strong, as consumers responded to innovation and value offerings, while KDP also saw strong momentum in emerging growth areas, particularly energy.
• U.S. Coffee sales increased 3.9% to $1.2 bln, but growth was entirely price-led, with net price realization contributing 8 pts, partially offset by a 4.1-pt decline in volume/mix.
• Coffee remains the pressure point near term, with elevated green coffee costs and tariffs weighing on profitability. Adj. operating income fell 8.8% yr/yr to $364 mln, and KDP expects cost pressure to remain most pronounced in 1H26.
• International remained healthy despite macro volatility, with sales increasing 16% in constant currency, driven by both pricing and volume/mix, while adj. operating income increased 20% to $163 mln.
• KDP's FY26 outlook includes the expected contribution from JDE Peet's, while standalone KDP is still expected to deliver 4-6% constant-currency sales growth and 4-6% EPS growth.

Briefing.com Analyst Insight

KDP's Q4 results were strong, highlighted by a second straight quarter of double-digit revenue growth and continued bottom-line improvement. Beverage performance remains a key differentiator, and KDP continues to see a strong consumer response to innovation and marketing across CSDs, energy, and sports hydration. The main watch items remain U.S. Coffee and the pending JDE Peet's acquisition. Coffee is expected to pressure profitability near term as elevated green coffee costs and tariffs weigh on margins, with the impact most pronounced in Q1, though management views this as cyclical and expects improvement later in the year. Meanwhile, the JDE Peet's acquisition remains on track for an early-April close, and KDP is already advancing integration and separation planning. Overall, KDP’s strong Q4 results and FY26 outlook reinforce the view that the company is entering a pivotal year with solid base business momentum, while the planned separation offers an additional potential upside lever.