Keurig Dr Pepper Q3 FY2026: sales jump 70.6%, margins compress
Keurig Dr Pepper's Q3 FY2026 headline — revenue up 70.6% to $7.34 billion and adjusted EPS of $0.66 — is mostly the JDE Peet's acquisition doing the work. Legacy sales grew 8.6%, which is genuinely strong. The trouble sits below the top line: gross margin fell to 48.0% from 54.3%, interest expense more than doubled, and full-year guidance was reaffirmed only by leaning harder on acquired sales. Read the organic numbers, not the consolidated ones.
1 · Expected vs. Actual
Free preview belowGAAP EPS was $0.59 versus $0.49, and adjusted EPS of $0.66 beat the $0.6247 consensus by about 5.6%. Be careful with that beat: $99 million of tariff refunds landed in the quarter and lifted both GAAP and adjusted operating income. Back that out and the underlying beat is thinner than the headline suggests.
Reported revenue was $7.34 billion, up 70.6% from $4.31 billion a year ago, but JDE Peet's — which only closed on April 1 — contributed $2.65 billion of that. Strip it out and legacy KDP still grew 8.6%, built on 6.5% volume/mix and 2.1% price. That is a real organic number, not an accounting artifact, and it is the most encouraging figure in the release.
Full-year net sales guidance was reaffirmed at $25.90 billion to $26.40 billion, and the $26.15 billion midpoint implies roughly $7.52 billion of Q4 revenue after $18.63 billion year to date. Consensus for next quarter sits at $7.71 billion, above what the midpoint implies. The reaffirmation also now depends on $8.30 billion to $8.40 billion of acquired sales while legacy EPS growth was trimmed to 3.0% to 5.0%.
Log in to read 35 analyses a week for free
Create a free account to read 35 full earnings analyses each week — all five steps: expected vs. actual, guidance tracker, money flow, balance sheet and risks. Members get unlimited access.
Figures on this page come from the company's original SEC filings. The analysis is generated automatically and checked against validation rules, but may still contain errors or omissions. Not investment advice. · Generated 2026-11-10
Answers are based on the earnings release and the analysis above. Free accounts get 3 questions a week; members get 30 a day.