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Keurig Dr Pepper

KDP · Nasdaq

Drinks earn more than the whole company's operating profit

U.S. Refreshment Beverages earned $857M, 136.5% of the company's $628M operating income, as JDE Peet's lost $62M and unallocated corporate costs weighed.

Q2 FY2026, the quarter to Jun 30, 2026 · 10-Q filed Aug 10, 2026

Q2 FY2026 · revenue
$7.3B+101.1% on the year
Operating margin
8.6%
Net income
$142.0M
Free cash flow, quarter
$714.0M

Largest source of revenue: K-cup pods, 48.2% of the total.

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Where Keurig Dr Pepper's money goes

Tap the picture to explore the flow: levels, scale, every line and its figures.
Key insights · Q2 FY2026
  1. 01

    Drinks earn more than the whole company's operating profit

    U.S. Refreshment Beverages earned $857M, 136.5% of the company's $628M operating income, as JDE Peet's lost $62M and unallocated corporate costs weighed.

    Why it matters

    U.S. Refreshment Beverages earned $857M of operating income on $2.9B of net sales, a 29.3% margin. U.S. Coffee earned $149M on $918M (16.2%) and KDP International $152M on $664M (22.9%). JDE Peet's, in its first quarter inside KDP, reported an operating loss of $62M on $2.8B of net sales.1

    As shares of the $628M total, U.S. Refreshment Beverages is 136.5%, KDP International 24.2%, U.S. Coffee 23.7% and JDE Peet's -9.9%. A share above 100% is possible because the total also carries the JDE Peet's loss and unallocated corporate costs, which the filing ties partly to transaction and integration costs for the acquisition and the planned separation.1

    AnalysisAnalysis: for now the drinks business carries the coffee expansion. The JDE Peet's loss includes the one-time inventory step-up recognized in cost of sales as the acquired stock was sold, so it is not a clean read of that business's earning power. Quarters without that charge are the cleaner measure of what JDE Peet's adds.

  2. 02

    Interest now takes more than half of operating profit

    Net interest of $336M equaled 53.5% of operating income, against 20.0% a year earlier, as acquisition debt arrived while operating income fell 30.1%.

    Why it matters

    Net interest expense was $336M against $180M a year earlier, while income from operations fell to $628M from $898M. The filing says the company "incurred and assumed significant debt" for the JDE Peet's acquisition, and that Moody's and S&P downgraded its ratings, which "remain investment grade".1

    After interest, pretax income was $305M against $718M. The effective tax rate rose to 31.1% from 23.8%, which the filing attributes to a non-cash revaluation of state deferred tax liabilities.1

    AnalysisAnalysis: the share is inflated by a quarter that also carries deal costs and the inventory step-up in operating income. It can fall in two ways: operating income rising as integration and separation costs fade, or debt coming down from operating cash. The filing warns the downgrade may raise borrowing costs, which would push the other way.

  3. 03

    Outside investors took 32.4% of net income

    Of $210M of net income, $68M went to outside investors, mainly in the Pod Manufacturing JV, leaving $142M for KDP, 74.0% less than a year earlier.

    Why it matters

    Net income was $210M against $547M a year earlier. Of it, $68M went to non-controlling interests, mainly the Pod Manufacturing JV, against nothing a year earlier, leaving $142M attributable to KDP. Diluted EPS was $0.04 against $0.40, which the filing says was also reduced by dividends allocated to preferred holders.1

    The JDE Peet's purchase was funded with several kinds of capital: a term loan, new bonds, convertible preferred stock, and the sale of a minority stake in the pod manufacturing business to outside investors, who receive a targeted return from its cash.1

    AnalysisAnalysis: each layer is cheaper or less dilutive than issuing common shares at once, and each is paid before common holders. Net sales rose 75.6% while income attributable to KDP fell, so growth in consolidated profit reaches the common share only after interest, the JV partners and the preferred dividend.

  4. 04

    U.S. Coffee: net price up 5.0%, coffee volume down 12.8%

    Brewer volume still rose 2.1% while coffee volume fell; the filing cites price elasticity, single serve category softness and a temporary reporting shift.

    Why it matters

    U.S. Coffee net sales were $918M with operating income of $149M, a 16.2% margin. Net price realization was 5.0%. Coffee and related products volume fell 12.8%, "reflecting price elasticity impacts, single serve category softness, and a temporary reporting shift of Peet's K-cup pods into the JDE Peet's segment." Appliance volume rose 2.1%.1

    Outside the U.S., KDP International had net price realization of 5.9%, coffee and related products volume down 2.0% and appliance volume up 6.3%. The filing warns that partner brands could begin "vertically integrating to manufacture their own Keurig-compatible pods", which it says could compress prices and gross margins.1

    AnalysisAnalysis: part of the drop is a reporting move rather than lost demand, and the filing does not split it out. If pod volume steadies once the price increases are a year old, the drop was elasticity at a point in time. If it keeps falling while brewers keep selling, households are brewing less or buying other pods, which is a different problem.

Sources

  1. 1.Keurig Dr Pepper 10-Q for the period to 2026-06-30 (the filing), Aug 10, 2026, read Nov 2, 2026

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Business performance

Growth, profit and margin

Revenue went from $5.7B in FY2008 to $16.6B in FY2025, the operating margin from -2.9% to 21.5%, over 17 years.

  • Revenue$16.6B
  • Operating income$3.6B
  • Operating margin21.5%
Period
Q2 FY2026
Revenue
$7.3B
Operating income
$628.0M
Operating margin
8.6%
Net income
$142.0M
Free cash flow
$714.0M
Business performance

Does the profit turn into cash?

Q2 FY2026: free cash flow of $714.0M against net income of $142.0M in the quarter.

  • Operating cash flow$2.0B
  • Capital expenditure$486.0M
  • Free cash flow$1.5B
  • Net income$2.1B

Capital expenditure is drawn below the axis as cash out. Cash conversion is operating cash flow over net income, shown in the tooltip for years with a profit.

Financial data and sources

How the revenue mix has shifted

Each breakdown the filing reports, as shares of revenue, for every period it restates.

Revenue (Details). The filing restates this breakdown for 1 period.

Click a member to isolate it across the years shown.

The figures

Margins, cash and growth for the period, each with what it was computed from.

Gross margin
41.9%
Source10-Q, Derived from Gross profit and Net sales in the 10-Q filed 2026-08-10
Operating margin
8.6%
Source10-Q, Derived from Income from operations and Net sales in the 10-Q filed 2026-08-10
Net margin
1.9%
Source10-Q, Derived from Net income attributable to KDP and Net sales in the 10-Q filed 2026-08-10
Free cash flow, quarter
$714.0M
Source10-Q, Derived from the prior period in the history in the 10-Q filed 2026-08-10
Free cash flow margin, quarter
9.8%
Source10-Q, Derived from the prior period in the history in the 10-Q filed 2026-08-10
Cash conversion, quarter
6.30x
Source10-Q, Derived from the prior period in the history in the 10-Q filed 2026-08-10
Capital spending, quarter
2.5%
Source10-Q, Derived from the prior period in the history in the 10-Q filed 2026-08-10
Revenue growth
+101.1%
From the record's own history, against the prior year.

Where revenue comes from

Every breakdown the filing reports for the period, with each item's share.

Revenue streams

K-cup pods$3.5B48.2%
LRB$3.4B46.0%
Other$278.0M3.8%
Appliances$148.0M2.0%

Source10-Q, us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax, as reported in the 10-Q filed 2026-08-10

Segments

U.S. Refreshment Beverages$2.9B40.0%
JDE Peet's$2.8B38.3%
U.S. Coffee$918.0M12.6%
KDP International$664.0M9.1%

Source10-Q, us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax, as reported in the 10-Q filed 2026-08-10

What it costs

The cost lines beneath operating income, each as a share of revenue, then the operating result.

Costs are reported by function: what it cost to make what was sold, then the expenses of selling, developing and administering.

Cost lineQ2 FY2026Of revenueSource
Cost of sales$4.2B58.1%Source10-Q, us-gaap:CostOfGoodsAndServicesSold, as reported in the 10-Q filed 2026-08-10
Income from operations$628.0M8.6%Source10-Q, us-gaap:OperatingIncomeLoss, as reported in the 10-Q filed 2026-08-10

Operating income by segment

Where the operating profit is earned, as the filing reports it.

Segments

U.S. Refreshment Beverages$857.0M136.5%
KDP International$152.0M24.2%
U.S. Coffee$149.0M23.7%
JDE Peet's-$62.0M-9.9%

Shares of operating income. The segments do not sum to the total; the filing states them beside it. Source10-Q, us-gaap:OperatingIncomeLoss, as reported in the 10-Q filed 2026-08-10

Operating figures the company states

From the text of the filing rather than its statements, each with the sentence that states it.

Coffee and related products sales volume growth, consolidated (includes JDE Peet's)
416.5%
As of Jun 30, 2026
View source
Coffee and related products 416.5
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, 10-Q filed Aug 10, 2026
KDP International appliance volume growth
6.3%
As of Jun 30, 2026
View source
Appliance volumes increased 6.3%.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, 10-Q filed Aug 10, 2026
KDP International coffee and related products volume decline
2.0%
As of Jun 30, 2026
View source
Coffee and related products volume decreased 2.0%.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, 10-Q filed Aug 10, 2026
KDP International LRB sales volume growth
4.5%
As of Jun 30, 2026
View source
LRB sales volume increased 4.5%.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, 10-Q filed Aug 10, 2026
KDP International net price realization
5.9%
As of Jun 30, 2026
View source
KDP International 6.5 5.9 7.2 19.6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, 10-Q filed Aug 10, 2026
Markets served by the coffee business (more than)
100 markets
As of Jun 30, 2026
View source
Our global coffee business spans more than 100 markets
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, 10-Q filed Aug 10, 2026
Net price realization, consolidated
4.2%
As of Jun 30, 2026
View source
Net price realization 4.2
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, 10-Q filed Aug 10, 2026
Owned, licensed and partner brands (more than)
150 brands
As of Jun 30, 2026
View source
KDP is a leading beverage company with more than 150 owned, licensed, and partner brands, that meet a wide range of needs and occasions.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, 10-Q filed Aug 10, 2026
U.S. Coffee appliance volume growth
2.1%
As of Jun 30, 2026
View source
Appliance volume increased 2.1%.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, 10-Q filed Aug 10, 2026
U.S. Coffee coffee and related products volume decline
12.8%
As of Jun 30, 2026
View source
Coffee and related products volume decreased 12.8%, reflecting price elasticity impacts, single serve category softness, and a temporary reporting shift of Peet's K-cup pods into the JDE Peet's segment.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, 10-Q filed Aug 10, 2026
U.S. Coffee net price realization
5.0%
As of Jun 30, 2026
View source
U.S. Coffee (8.2) 5.0 - (3.2)
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, 10-Q filed Aug 10, 2026
U.S. Refreshment Beverages net price realization
3.5%
As of Jun 30, 2026
View source
U.S. Refreshment Beverages 6.5 % 3.5 % - % 10.0 %
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, 10-Q filed Aug 10, 2026
U.S. Refreshment Beverages sales volume growth
2.4%
As of Jun 30, 2026
View source
Sales volume increased 2.4% in the second quarter of 2026, led by growth in energy and sports hydration drinks, partially offset by declines in the balance of our portfolio.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, 10-Q filed Aug 10, 2026

The statements, as filed

The income statement, cash flow statement and balance sheet in the company's own order and words. Every line links to the filing.

Income statement17 lines, as presented in the 10-Q
LineQ2 FY2026A year earlierChangeOf revenueSource
Income Statement
Net sales$7.31B$4.16B+76%100%Source10-Q, us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax, as reported in the 10-Q filed 2026-08-10
Cost of sales$4.24B$1.91B+122%58.1%Source10-Q, us-gaap:CostOfGoodsAndServicesSold, as reported in the 10-Q filed 2026-08-10
Gross profit$3.07B$2.26B+36%41.9%Source10-Q, us-gaap:GrossProfit, as reported in the 10-Q filed 2026-08-10
Selling, general, and administrative expenses$2.40B$1.36B+77%32.8%Source10-Q, us-gaap:SellingGeneralAndAdministrativeExpense, as reported in the 10-Q filed 2026-08-10
Other operating expense (income), net (shown as a deduction)(-$41.0M)-$1.0M+4,000%0.6%Source10-Q, us-gaap:OtherOperatingIncomeExpenseNet, as reported in the 10-Q filed 2026-08-10
Income from operations$628.0M$898.0M-30%8.6%Source10-Q, us-gaap:OperatingIncomeLoss, as reported in the 10-Q filed 2026-08-10
Interest expense, net (shown as a deduction)(-$336.0M)-$180.0M+87%4.6%Source10-Q, us-gaap:InterestIncomeExpenseNet, as reported in the 10-Q filed 2026-08-10
Other (income) expense, net (shown as a deduction)($13.0M)$00.2%Source10-Q, us-gaap:OtherNonoperatingIncomeExpense, as reported in the 10-Q filed 2026-08-10
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest, Total$305.0M$718.0M-58%4.2%Source10-Q, us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest, as reported in the 10-Q filed 2026-08-10
Provision for income taxes$95.0M$171.0M-44%1.3%Source10-Q, us-gaap:IncomeTaxExpenseBenefit, as reported in the 10-Q filed 2026-08-10
Net income$210.0M$547.0M-62%2.9%Source10-Q, us-gaap:ProfitLoss, as reported in the 10-Q filed 2026-08-10
Net Income (Loss) Attributable to Noncontrolling Interest$68.0M$00.9%Source10-Q, us-gaap:NetIncomeLossAttributableToNoncontrollingInterest, as reported in the 10-Q filed 2026-08-10
Net income attributable to KDP$142.0M$547.0M-74%1.9%Source10-Q, us-gaap:NetIncomeLoss, as reported in the 10-Q filed 2026-08-10
Earnings per common share:
Basic (in dollars per share)$0$0-90%0.0%Source10-Q, us-gaap:EarningsPerShareBasic, as reported in the 10-Q filed 2026-08-10
Diluted (in dollars per share)$0$0-90%0.0%Source10-Q, us-gaap:EarningsPerShareDiluted, as reported in the 10-Q filed 2026-08-10
Weighted average common shares outstanding:
Basic (in shares)1,360,600,0001,358,300,000+0.2%Source10-Q, us-gaap:WeightedAverageNumberOfSharesOutstandingBasic, as reported in the 10-Q filed 2026-08-10
Diluted (in shares)1,364,500,0001,362,800,000+0.1%Source10-Q, us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding, as reported in the 10-Q filed 2026-08-10
Cash flow statement7 lines, as presented in the 10-Q

Year to date, as a quarterly filing reports it.

LineQ2 FY2026A year earlierChangeSource
Operating activities:
Net income$210.0M$547.0M-62%Source10-Q, us-gaap:ProfitLoss, as reported in the 10-Q filed 2026-08-10
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangibles$124.0M$34.0M+265%Source10-Q, us-gaap:AmortizationOfIntangibleAssets, as reported in the 10-Q filed 2026-08-10
Financing activities:
Tax withholdings related to net share settlements (shown as a deduction)($6.0M)$5.0M+20%Source10-Q, us-gaap:PaymentsRelatedToTaxWithholdingForShareBasedCompensation, as reported in the 10-Q filed 2026-08-10
Statement of Cash Flows
Cash, Cash Equivalent, Restricted Cash, and Restricted Cash Equivalent, Continuing Operation, Ending Balance$1.55B$565.0M+175%Source10-Q, us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents, as reported in the 10-Q filed 2026-08-10
Supplemental Cash Flow Information
Accrued consideration to untendered shareholders in the JDE Peet's Acquisition$402.0M$0Source10-Q, kdp:AccruedConsiderationToUntenderedShareholdersInTheJDEPeetsAcquisition, as reported in the 10-Q filed 2026-08-10
Common Stock Issued$314.0MSource10-Q, us-gaap:DividendsPayableCurrentAndNoncurrent [us-gaap:CommonStockMember], as reported in the 10-Q filed 2026-08-10
Redeemable Convertible Preferred Stock$28.0MSource10-Q, us-gaap:DividendsPayableCurrentAndNoncurrent [us-gaap:RedeemableConvertiblePreferredStockMember], as reported in the 10-Q filed 2026-08-10
Balance sheet35 lines, as presented in the 10-Q
LineQ2 FY2026A year earlierChangeSource
Current assets:
Cash and cash equivalents$1.52BSource10-Q, us-gaap:CashAndCashEquivalentsAtCarryingValue, as reported in the 10-Q filed 2026-08-10
Restricted cash and restricted cash equivalents$36.0MSource10-Q, us-gaap:RestrictedCashAndCashEquivalentsAtCarryingValue, as reported in the 10-Q filed 2026-08-10
Trade accounts receivable, net$2.42BSource10-Q, us-gaap:AccountsReceivableNetCurrent, as reported in the 10-Q filed 2026-08-10
Inventories$3.86BSource10-Q, us-gaap:InventoryNet, as reported in the 10-Q filed 2026-08-10
Prepaid expenses and other current assets$1.63BSource10-Q, us-gaap:PrepaidExpenseAndOtherAssetsCurrent, as reported in the 10-Q filed 2026-08-10
Total current assets$9.46BSource10-Q, us-gaap:AssetsCurrent, as reported in the 10-Q filed 2026-08-10
Assets
Property, plant, and equipment, net$6.32BSource10-Q, us-gaap:PropertyPlantAndEquipmentNet, as reported in the 10-Q filed 2026-08-10
Equity method investments$1.73BSource10-Q, us-gaap:EquityMethodInvestments, as reported in the 10-Q filed 2026-08-10
Goodwill$29.76BSource10-Q, us-gaap:Goodwill, as reported in the 10-Q filed 2026-08-10
Intangible assets, net$38.11BSource10-Q, us-gaap:IntangibleAssetsNetExcludingGoodwill, as reported in the 10-Q filed 2026-08-10
Deferred tax assets$192.0MSource10-Q, us-gaap:DeferredIncomeTaxAssetsNet, as reported in the 10-Q filed 2026-08-10
Other non-current assets$2.04BSource10-Q, us-gaap:OtherAssetsNoncurrent, as reported in the 10-Q filed 2026-08-10
Total assets$87.62BSource10-Q, us-gaap:Assets, as reported in the 10-Q filed 2026-08-10
Current liabilities:
Accounts payable$6.29BSource10-Q, us-gaap:AccountsPayableCurrent, as reported in the 10-Q filed 2026-08-10
Accrued expenses$2.43BSource10-Q, us-gaap:AccruedLiabilitiesCurrent, as reported in the 10-Q filed 2026-08-10
Structured payables$1.02BSource10-Q, kdp:StructuredPayablesCurrent, as reported in the 10-Q filed 2026-08-10
Short-term borrowings and current portion of long-term obligations$8.39BSource10-Q, us-gaap:DebtCurrent, as reported in the 10-Q filed 2026-08-10
Other current liabilities$1.60BSource10-Q, us-gaap:OtherLiabilitiesCurrent, as reported in the 10-Q filed 2026-08-10
Total current liabilities$19.74BSource10-Q, us-gaap:LiabilitiesCurrent, as reported in the 10-Q filed 2026-08-10
Liabilities, convertible preferred stock, and equity
Long-term obligations$21.59BSource10-Q, us-gaap:LongTermDebtNoncurrent, as reported in the 10-Q filed 2026-08-10
Deferred tax liabilities$8.94BSource10-Q, us-gaap:DeferredIncomeTaxLiabilitiesNet, as reported in the 10-Q filed 2026-08-10
Other non-current liabilities$3.71BSource10-Q, us-gaap:OtherLiabilitiesNoncurrent, as reported in the 10-Q filed 2026-08-10
Total liabilities$53.97BSource10-Q, us-gaap:Liabilities, as reported in the 10-Q filed 2026-08-10
Temporary Equity
Temporary Equity, Carrying Amount, Attributable to Parent$4.42BSource10-Q, us-gaap:TemporaryEquityCarryingAmountAttributableToParent, as reported in the 10-Q filed 2026-08-10
Equity, Attributable to Parent
Preferred stock, par value (in dollars per share)$0Source10-Q, us-gaap:PreferredStockParOrStatedValuePerShare, as reported in the 10-Q filed 2026-08-10
Preferred Stock, Value, Issued$0Source10-Q, us-gaap:PreferredStockValue, as reported in the 10-Q filed 2026-08-10
Common Stock, Value, Issued$14.0MSource10-Q, us-gaap:CommonStockValue, as reported in the 10-Q filed 2026-08-10
Additional paid-in capital$19.81BSource10-Q, us-gaap:AdditionalPaidInCapitalCommonStock, as reported in the 10-Q filed 2026-08-10
Retained earnings$5.33BSource10-Q, us-gaap:RetainedEarningsAccumulatedDeficit, as reported in the 10-Q filed 2026-08-10
Accumulated other comprehensive (loss) income-$116.0MSource10-Q, us-gaap:AccumulatedOtherComprehensiveIncomeLossNetOfTax, as reported in the 10-Q filed 2026-08-10
Total stockholders' equity$25.03B$24.99B+0.2%Source10-Q, us-gaap:StockholdersEquity, as reported in the 10-Q filed 2026-08-10
Liabilities, convertible preferred stock, and equity
Non-controlling interests$4.20BSource10-Q, us-gaap:MinorityInterest, as reported in the 10-Q filed 2026-08-10
Total equity$29.23BSource10-Q, us-gaap:StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest, as reported in the 10-Q filed 2026-08-10
Total liabilities, convertible preferred stock, and equity$87.62BSource10-Q, us-gaap:LiabilitiesAndStockholdersEquity, as reported in the 10-Q filed 2026-08-10
Statement of Financial Position
Temporary Equity, Shares Authorized4,500,000Source10-Q, us-gaap:TemporaryEquitySharesAuthorized, as reported in the 10-Q filed 2026-08-10

About this data

Source
Keurig Dr Pepper 10-Q, accession 0001418135-26-000051, filed Aug 10, 2026, read on Nov 2, 2026.
History
From the SEC's XBRL company facts, the value from the latest filing that stated each period.
Reading
Paragraphs marked Analysis are CXProWealth's reading; everything else is the filing's own numbers and words, or a cited source.
Version
methodology business-lens-1.0 · schema 1.2.0 · run business-lens-2026-11-02
Edge and risks

What holds Keurig Dr Pepper's model up, and what could bend it

Competitive edge

  • Selling concentrate to bottlers keeps drinks margins high

    U.S. Refreshment Beverages earned a 29.3% operating margin, against 16.2% in U.S. Coffee, with bottlers carrying much of the capital-heavy bottling and delivery.

    The detail

    The segment sells "branded concentrates, syrups, finished beverages, and other consumables" to bottlers, distributors and retailers. It earned $857M on $2.9B of net sales. Volume rose 2.4%, "led by growth in energy and sports hydration drinks", with net price realization of 3.5%. Liquid refreshment beverage sales rose 12.9% to $3.4B.1

    AnalysisAnalysis: a network that already reaches the shelf earns more on each extra brand it carries, including partner brands the company does not own. That is why it adds energy and hydration brands through partnerships and minority stakes rather than building each one from nothing.

  • A small brewer line feeds a large coffee business

    Appliances were $148M, 2.0% of net sales, against $3.5B of coffee and related products: the brewer is sold once, the coffee it brews recurs.

    The detail

    U.S. Coffee sells K-Cup pods, single serve brewers and accessories to partners, retailers and directly through Keurig.com. Appliance net sales were $148M this quarter, up 10.4% from a year earlier, and U.S. appliance volume rose 2.1%.1

    AnalysisAnalysis: licensing the format to partner brands and private labels puts more pods in the system, which makes the brewer more useful, which sells more brewers. The edge holds as long as households keep brewing on the format, which is why pod volume matters more than brewer sales.

  • JDE Peet's turns Keurig into a global coffee company

    JDE Peet's added $2.8B of net sales, 38.3% of the total, and brands such as Jacobs, L'OR and Peet's across more than 100 markets.

    The detail

    Net sales rose 75.6% to $7.3B from $4.2B, mostly because JDE Peet's joined at the start of the quarter. The filing describes more than 150 owned, licensed and partner brands and a coffee business across more than 100 markets, including hot beverage service to businesses and institutions.1

    AnalysisAnalysis: breadth across markets and channels spreads exposure across many retail systems and tastes. The plan is to combine this business with Keurig's coffee business and separate it as its own US-listed company, so the edge belongs to the coffee company that results.

What to watch

  • Acquisition debt and a ratings downgrade

    The filing says KDP "incurred and assumed significant debt"; Moody's and S&P downgraded it, and net interest rose to $336M from $180M.

    The detail

    The company warns the debt could hurt its financial performance and that the downgrade, though its ratings "remain investment grade", may raise borrowing costs and limit access to capital markets and flexibility. Net interest of $336M was 53.5% of the quarter's $628M operating income.1

  • Input costs that price increases may not cover

    Gross margin fell to 41.9% from 54.2%; beside the inventory step-up, the filing names ingredients, materials and tariffs, and warns price may not offset costs.

    The detail

    Cost of sales rose 122.4% against net sales up 75.6%. Green coffee, aluminum, resins, sugar and fuel are subject to price swings, and premium Arabica cannot be readily substituted. The company says it may be unable to raise prices enough, or soon enough, without losing volume, and that its hedges may not match the timing of its sales.1

    AnalysisAnalysis: U.S. Coffee already shows the trade-off, with net price realization of 5.0% and coffee volume down 12.8%.

  • Integrating JDE Peet's, then splitting in two

    SG&A rose 76.8% to $2.4B with deal costs, and the filing warns integration may cost more and the separation may not happen as planned.

    The detail

    The filing attributes the SG&A increase to the inclusion of JDE Peet's and to transaction and integration costs for the acquisition and the planned separation. It warns integration may cost more and take longer than expected, the separation may not happen on the planned terms or timeline, or at all, and JDE Peet's brings exposure to Russia, including the possible loss of those operations.1

    AnalysisAnalysis: how unallocated corporate costs and debt are divided between the two future companies would shape each one's margins and leverage more than this quarter's segment results do.

Sources

  1. 1.Keurig Dr Pepper 10-Q for the period to 2026-06-30 (the filing), Aug 10, 2026, read Nov 2, 2026
Go deeper

Keurig Dr Pepper, further in

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What could change the outlook

What Keurig Dr Pepper's numbers depend on from here, read from the filing: the conditions behind this period's margins and growth, and where a change would show first.

  • What has to go right for profit to catch up with sales?

    Which of this quarter's charges fall away, what interest and the new claims leave for common holders, and the measures that show whether pod volume steadies.

  • Two companies from one: where the costs and the debt land

    What the separation plan means for each future company's margins and leverage, and which lines in the filing already show the division.

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Questions to start with
  • Why does Keurig Dr Pepper's drinks segment earn more than the company's whole $628M operating income?
  • How much of KDP's operating profit would interest take if JDE Peet's integration costs fell away?
  • Is the 12.8% drop in Keurig's U.S. coffee volume mostly price elasticity or the reporting shift to JDE Peet's?

Business Lens describes Keurig Dr Pepper from its own filings with the SEC. It is not a view on its shares, a target, or advice to buy, sell or hold anything; figures are as filed and may be restated by the company later. The filing, the dates and the version are under the financial data above.