JDE Peet's Acquisition Drives Volume/Mix
The acquisition contributed 67.3% of the 70.4% volume/mix growth in Q2 FY2026, and 45 percentage points to gross profit growth.
Source: 10-Q Item 2 MD&A
Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
Keurig Dr Pepper's second quarter of fiscal 2026 was defined by the acquisition of JDE Peet's, which transformed the company's scale but pressured profitability. The legacy U.S. Refreshment Beverages segment posted solid results, offsetting headwinds in U.S. Coffee, which faced tariff impacts and a reporting shift. A $314 million inventory step-up charge and elevated interest expense from acquisition financing led to a sharp decline in attributable net income, despite gross profit expansion from the added scale.
Revenue
$7.31B
+75.57% YoY
EPS (Diluted)
$0.04
-90.00% YoY
Gross Margin
41.9%
-12.2 pts YoY
Operating Income
$628M
-30.07% YoY
Source: SEC XBRL
Keurig Dr Pepper (KDP) reported Q2 FY2026 revenue of $7.31B, up 75.6% year over year. Operating margin was 8.6%, down 13.0 points from 21.6% a year earlier. KDP's fiscal Q2 FY2026 corresponds to calendar Q2 2026.
Last 4 quarters: 3 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026This filing | 0.57 | 0.54 | Beat +5.0% |
| Mar 2026 | 0.39 | 0.38 | Beat +3.8% |
| Dec 2025 | 0.60 | 0.59 | Beat +0.9% |
| Sep 2025 | 0.54 | 0.54 | Miss -0.4% |
Adjusted (non-GAAP) EPS of $0.57 versus the $0.54 analyst consensus — a +5.0% beat for Jun 2026. Analyst consensus is quoted on the adjusted (non-GAAP) basis the street uses. GAAP diluted EPS for this quarter was $0.04.
4 reported segments · SEC XBRL
Segment revenue totals $7.31B, which is the $7.31B of consolidated revenue on the income statement.
Profit above is reported as operating income, the measure KDP itself discloses in this filing. Each company chooses its own measure here, so these margins are not comparable with another company's.
Compiled by AI from 10-Q Item 2 of this filing
The acquisition contributed 67.3% of the 70.4% volume/mix growth in Q2 FY2026, and 45 percentage points to gross profit growth.
Source: 10-Q Item 2 MD&A
A $314 million non-cash charge from the fair-value step-up of JDE Peet's inventory was recognized in cost of sales, reducing gross profit by 14 percentage points.
Source: 10-Q Item 2 MD&A
The company incurred $624 million in pre-tax acquisition, integration, and financing costs in the first six months, with SG&A expenses rising 20 percentage points from these costs in Q2.
Source: 10-Q Item 2 MD&A
U.S. Coffee operating income fell 36.1% due to integration costs (22 pts), unfavorable ingredient/ tariff impacts (17 pts), and a reporting shift of Peet's K-cup pods.
Source: 10-Q Item 2 MD&A
The effective tax rate rose 730 bps to 31.1%, primarily from a non-cash revaluation of state deferred tax liabilities triggered by the acquisition (920 bps impact).
Source: 10-Q Item 2 MD&A
Compiled by AI from 10-Q Item 1A of this filing · 3 high, 2 medium, 0 low
We may not successfully integrate JDE Peet's into our business, or such integration may be more difficult, time-consuming, or costly than expected, which could adversely affect our business.
Source: 10-Q Item 1A Risk Factors
Our acquisition of JDE Peet's has resulted in significant additional debt. This could limit our ability to obtain additional financing, increase our vulnerability to economic downturns, and adversely affect our financial performance.
Source: 10-Q Item 1A Risk Factors
Our acquisition of JDE Peet's exposes us to significant geopolitical, regulatory, and operational risks in Russia, including the potential loss of those operations, which could adversely affect our business.
Source: 10-Q Item 1A Risk Factors
We face disruption of our supply chain and increased input costs due to tariffs, commodity price volatility (especially green coffee), and inflation, which have compressed margins.
Source: 10-Q Item 1A Risk Factors
The Separation may not be completed on the terms or timeline currently contemplated, if at all, and will involve significant time, expenses, and resources, which could adversely affect our business.
Source: 10-Q Item 1A Risk Factors
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 7.31 $B | 4.16 $B | +75.57% |
Cost of Revenue $B | 4.24 $B | 1.91 $B | +122.38% |
Gross Profit $B | 3.07 $B | 2.26 $B | +35.96% |
Operating Income $M | 628.00 $M | 898.00 $M | -30.07% |
Net Income $M | 142.00 $M | 547.00 $M | -74.04% |
EPS (Basic) $ | 0.04 $ | 0.40 $ | -90.00% |
EPS (Diluted) $ | 0.04 $ | 0.40 $ | -90.00% |
SG&A Expense $B | 2.40 $B | 1.36 $B | +76.77% |
Answers draw on this SEC filing and the data on this page
Expected release date, analyst estimates & what to watch
KDP reported Q1 2026 revenue of $3.98B (+9.4% YoY), but net income fell sharply by 47.8% to $270M, driven by rising costs, higher SG&A, and a significant balance sheet expansion tied to a major financing event.
KDP delivered strong FY2025 results with revenue rising 8.2% to $16.6B and net income surging 44.3% to $2.1B, driven by significant operating leverage, though operating cash flow declined 10.3% and the current ratio remains below 1.0.
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