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Keurig Dr Pepper Inc. (NASDAQ:KDP)

This company has been moved to the archive! The financial data has not been updated since July 28, 2022.

Common-Size Income Statement
Quarterly Data

Keurig Dr Pepper Inc., common-size consolidated income statement (quarterly data)

Microsoft Excel
3 months ended: Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Net sales 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Cost of sales -50.03 -46.39 -47.74 -43.54 -43.63 -44.87 -43.35 -43.58 -45.46 -44.43 -42.30 -43.38 -42.18 -44.17
Gross profit 49.97% 53.61% 52.26% 56.46% 56.37% 55.13% 56.65% 56.42% 54.54% 55.57% 57.70% 56.62% 57.82% 55.83%
Selling, general and administrative expenses -33.88 -33.07 -32.82 -32.00 -33.09 -33.12 -32.04 -31.42 -34.95 -39.34 -34.46 -35.26 -36.56 -36.38
Gain on litigation settlement 0.00 9.71 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Impairment of intangible assets 0.00 0.00 0.00 0.00 0.00 0.00 -2.15 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Other operating income (expense), net 0.00 1.14 1.95 0.00 0.10 0.03 -0.03 -0.07 0.00 1.61 1.06 -1.15 -0.39 0.44
Income from operations 16.09% 31.38% 21.38% 24.46% 23.38% 22.05% 22.43% 24.93% 19.59% 17.83% 24.30% 20.21% 20.87% 19.89%
Interest expense -4.92 -6.11 -3.51 -3.57 -3.98 -4.82 -4.68 -4.90 -5.48 -5.86 -5.35 -5.51 -6.05 -6.75
Loss on early extinguishment of debt -4.76 -1.56 0.00 0.00 0.00 -3.62 0.00 0.00 -0.07 -0.08 -0.07 0.00 0.00 -0.36
Gain on sale of equity method investment 0.00 1.62 15.45 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Impairment of investments and note receivable -0.17 -0.19 -0.50 0.00 0.00 0.00 0.00 -0.53 0.00 -3.29 0.00 0.00 0.00 0.00
Other income (expense), net -0.25 -0.29 -0.12 -0.03 0.13 0.10 0.13 -0.17 0.14 -0.77 -0.14 -0.31 -0.04 -0.20
Income before provision for income taxes 5.99% 24.85% 32.70% 20.86% 19.52% 13.71% 17.88% 19.34% 14.18% 7.85% 18.75% 14.39% 14.79% 12.58%
(Provision) benefit for income taxes 0.14 -5.85 -7.84 -4.58 -5.25 -2.52 -4.17 -4.67 -3.77 -1.88 -4.91 -3.80 -3.63 -3.39
Net income including non-controlling interest 6.13% 19.01% 24.86% 16.28% 14.27% 11.20% 13.71% 14.67% 10.41% 5.97% 13.84% 10.59% 11.17% 9.19%
Net loss attributable to non-controlling interest 0.00 0.00 0.00 0.03 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Net income attributable to KDP 6.13% 19.01% 24.86% 16.31% 14.27% 11.20% 13.71% 14.67% 10.41% 5.97% 13.84% 10.59% 11.17% 9.19%

Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).

The financial performance over the analyzed period is characterized by stable operating margins followed by significant gross margin compression and substantial volatility in net income due to non-recurring items. While the company maintained consistent efficiency for several years, the most recent quarters indicate increasing pressure on the cost of goods sold.

Gross Profitability and Cost of Sales
Gross profit margins remained relatively stable between 54% and 58% from March 2019 through September 2021. However, a clear downward trend emerged beginning in December 2021, where gross profit dropped to 52.26% and continued to decline to 49.97% by June 30, 2022. This erosion is directly linked to the cost of sales, which rose from a historical range of 42% to 45% to a peak of 50.03% in the final reported quarter, suggesting significant inflationary pressure or increased input costs.
Operating Expense Efficiency
Selling, general, and administrative (SG&A) expenses were generally well-contained, typically ranging between 31% and 36% of net sales. A spike to 39.34% occurred in March 2020, but the ratio subsequently stabilized around 33% through June 2022. This stability indicates that the company managed to keep overhead costs flat as a percentage of revenue, even as gross margins declined.
Analysis of Non-Recurring Items
Operating and net results were heavily influenced by sporadic, non-operational events. A gain on litigation settlement totaling 9.71% of net sales in March 2022 artificially inflated operating income to 31.38% for that period. Similarly, a substantial gain on the sale of an equity method investment in December 2021 (15.45%) and March 2022 (1.62%) significantly bolstered the bottom line. These gains were offset by periodic losses, including an impairment of intangible assets of 2.15% in December 2020 and losses on the early extinguishment of debt, which reached 4.76% in June 2022.
Interest and Financing Costs
Interest expense as a percentage of net sales showed a gradual decline from 6.75% in March 2019 to a low of 3.51% in December 2021. This trend reversed in the first half of 2022, with interest expenses rising back to 6.11% in March and 4.92% in June, indicating a shift in the company's debt service burden or financing costs.
Net Income Trends
Net income attributable to the company exhibited extreme volatility, fluctuating between 5.97% in March 2020 and 24.86% in December 2021. The peak in late 2021 was primarily driven by the gain on the sale of an equity method investment rather than core operational growth. By June 30, 2022, net income retreated to 6.13%, reflecting the combined impact of peak cost of sales and debt extinguishment losses.

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