Dr Pepper Raises Full-Year Guidance as Water Sales Continue to Climb
July 27 2016 - 8:50AM
Dow Jones News
Dr Pepper Snapple Group Inc. lifted its earnings outlook for the
year after topping second-quarter expectations, thanks to continued
demand for bottled water.
The Plano, Texas-based drink company has been logging solid
sales growth across its portfolio of noncarbonated drinks,
including Mott's apple juice, Fiji and Aguafiel bottled water and
tomato-and-seafood juice Clamato. Despite changing consumer tastes
away from food and beverage options that are perceived as unnatural
and processed, Dr Pepper has at the same time managed to lift soda
volume while larger rivals such as Coca-Cola Co. are struggling to
do so.
In its latest quarter, Dr Pepper said noncarbonated beverage
volume increased 2%, driven by a 25% jump in its water category and
another double-digit climb in Clamato sales volume. The gains
follow a 22% rise in first-quarter water sales and a 10% increase
in Clamato during the first three months. Carbonated drink volume,
meanwhile, inched up 1% as Schweppes sparkling water rose 9%.
Mexico and the Caribbean continued to be bright spots, with
volume rising 6% across those regions and offsetting flat volume in
the U.S. and Canada. As a result of its international exposure,
which is much less than its bigger rivals, unfavorable exchange
rates knocked 2% off second-quarter sales, the same hit reported in
the first quarter.
Over all for the period, Dr Pepper earned $260 million, or $1.39
a share, up from $220 million, or $1.14 a share, a year earlier.
Excluding certain items, profit per share rose to $1.25 from
$1.13.
Revenue edged up 2.4% to $1.7 billion.
Analysts projected $1.20 in per-share profit on $1.68 billion in
sales, according to Thomson Reuters.
For the year, Dr Pepper expects to post $4.27 to $4.35 in
adjusted earnings per share, up from earlier guidance of $4.20 to
$4.30 a share. Analysts have been looking for $4.35 in full-year
profit per share. The company still anticipates a 2% rise in sales
this year.
Shares in the company, up 25% over the past 12 months, were
inactive premarket.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
July 27, 2016 08:35 ET (12:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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