Keurig Dr Pepper (KDP) shares rose after the North American beverage company reported improved results for the third quarter of the 2025 financial year (Q3 FY25), upgraded its sales guidance and announced a private equity (PE) capital injection.
The company said net income increased 7.5% to US$662 million and diluted earnings per share (EPS) rose 8.9% to 49 cents on net sales, which grew 10.7% to $4.31 billion in the three months ended 30 September 2025.
Sales growth was driven by volume/mix growth of 6.4% and favourable net price realisation of 4.2% while income growth was driven by sales growth and productivity savings, partially offset by inflation.
For the first nine months of FY25, diluted EPS grew 9.5% to $1.27 on net sales, which rose 7.3% to $12.1 billion.
KDP revised its FY25 constant currency net sales growth guidance to the high-single-digit percentage range from the mid-single-digit growth outlook given previously but left the adjusted diluted EPS growth forecast unchanged at the high-single-digit range.
"We are pleased with our third quarter results, which demonstrated robust growth in U.S. Refreshment Beverages and encouraging sequential progress in U.S. Coffee.” CEO Tim Cofer said in a news release.
“Strong innovation and in-market execution drove market share gains across key categories, with sales momentum, along with disciplined actions to offset inflationary pressures, contributing to solid earnings and free cash flow growth.”
Keurig Dr Pepper Inc (NASDAQ: KDP) shares closed up $2.07 (7.62%) at $29.23 on Monday (Tuesday AEDT), capitalising the company at US$39.71 billion (A$60.62 billion).
The company also announced it had raised $7 billion from private equity firms Apollo Global Management (NYSE: APO) and Kohlberg Kravis Roberts (NYSE: KKR) to finance its previously-announced $18 billion purchase of Dutch coffee giant JDE Peet's (JDEP.AS).
The KDP share price plunged after it announced the purchase in August along with plans to split into publicly traded coffee operations and other beverage businesses, attracting shareholder criticism and activist Starboard Value to its share register.
Of the investment, $4 billion will go into a new K-Cup pod and single-serve manufacturing joint venture and $3 billion will be used to buy convertible preferred stock investment in KDP and the eventual beverage company.
KDP, which will retain a controlling interest in the two independent companies, also announced on Monday that it would seek a new chief executive for its coffee subsidiary, with Cofer to lead the standalone beverages unit.
