(Corrects typo in CEO’s name in paragraph 4)
By Anuja Bharat Mistry
Nov 3 (Reuters) – Keurig Dr Pepper said on Tuesday it expects slower US coffee profit growth in the fourth quarter on cautious spending and increased competition from private players.
Shares of the company fell about 5% despite a quarterly beat, but are up roughly 31% year-to-date.
Consumer goods companies are facing muted demand as budget-conscious shoppers shun pricier options in favor of cheaper private label as they battle higher costs of fuel and gas.
“We are seeing heightened value sensitivity in at-home coffee, particularly among the low- and middle-income consumers,” said CEO Tim Cofer during a post-earnings call, adding that US coffee profitability would grow at a more gradual pace than previously expected.
Coffee price cuts in some regions during the third quarter helped volumes grow 6.9%, but executives said single-serve demand was softer than expected.
Keurig on Tuesday lowered its fiscal 2026 sales target for Dutch coffee giant JDE Peet’s, whose acquisition it completed in April, to $8.3 billion-$8.4 billion from the prior range of $8.5 billion-$8.7 billion.
The company plans to take its coffee unit public early next year.
BEATS QUARTERLY SALES, PROFIT TARGETS
Keurig Dr Pepper reaffirmed its annual forecasts for the third time this year after beating quarterly sales and profit estimates on demand for its higher-priced sodas and energy drink brands.
Volumes in its US refreshment beverages segment — its biggest revenue generator — rose 7.2% in the quarter, while prices climbed 3.7% year-over-year.
Adjusted profit of 66 cents per share topped estimates of 62 cents, according to data compiled by LSEG.
Quarterly sales rose 70.6% to $7.34 billion, and edged past estimates of a 70.2% rise.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Vijay Kishore)
