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Mar 31, 2020
Keurig Dr Pepper Q1 2020 Earnings Report
Keurig Dr Pepper had a strong start to 2020 and reaffirmed its guidance for the year.
Key Takeaways
Keurig Dr Pepper reported a 4.4% increase in net sales to $2.61 billion for the first quarter of 2020, driven by growth in all four reporting segments. Adjusted diluted EPS advanced 16% to $0.29. The company reaffirmed its guidance for 2020, including double-digit adjusted diluted EPS growth and continued rapid deleveraging.
Net sales increased 4.4% to $2.61 billion, reflecting growth in all four reporting segments.
Adjusted diluted EPS advanced 16% to $0.29, compared to $0.25 in the year-ago period.
Free cash flow was strong at approximately $464 million.
The company reaffirmed its guidance for 2020, including double-digit adjusted diluted EPS growth.
Forward Guidance
KDP reaffirmed its guidance for 2020, expecting constant currency net sales growth in the range of 3% to 4%, with performance likely at the low end of the range. The Company expects full-year 2020 Adjusted diluted EPS growth in the range of 13% to 15%, or $1.38 to $1.40 per diluted share. The Company continues to expect its management leverage ratio in the range of 3.5x to 3.8x at year end 2020 and its management leverage ratio to be below 3.0x in two to three years from the July 2018 merger closing.
Positive Outlook
- Constant currency net sales growth in the range of 3% to 4%
- Adjusted diluted EPS growth in the range of 13% to 15%, or $1.38 to $1.40 per diluted share
- Management leverage ratio in the range of 3.5x to 3.8x at year end 2020
- Management leverage ratio to be below 3.0x in two to three years from the July 2018 merger closing
- Significant visibility and control over its cost structure, including aggressive cost management, productivity programs and merger synergies.
Challenges Ahead
- The impacts and volatility of COVID-19 are expected to be significant in 2020
- The timing and pacing of re-opening the economy and ultimately transitioning into what is likely to be a new normal are highly uncertain.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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