Can Dr Pepper Snapple’s 3Q17 Sales Surpass Expectations?
Dr Pepper Snapple Group (DPS) is scheduled to announce its 3Q17 results on October 25, 2017. The third-largest soda maker in the United States has beaten analysts’ sales expectations in nine of the past ten quarters. In 2Q17, it generated sales of $1.8 billion, which surpassed the consensus estimate by 1.6%.
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Growth in the previous quarter
Dr Pepper Snapple’s sales rose 6.0% in 2Q17, driven by increased shipments and a favorable product, package, and segment mix. The Bai Brands acquisition contributed 1.0% to the growth. Dr Pepper Snapple acquired Bai Brands in January 2017. Bai Brands makes beverages such as enhanced water, carbonated flavored water, coconut water, and premium ready-to-drink teas.
The loss of the distribution of Rockstar negatively impacted Dr Pepper Snapple’s 2Q17 net sales by 0.50%.
Analysts expect Dr Pepper Snapple’s sales to rise 5.2% to $1.8 billion in 3Q17. In July 2017, the company’s guidance indicated a net sales growth of 4.5% for 2017, including the impact of the Bai Brands acquisition. However, its 2017 sales growth could be lower due to the impact of the hurricanes in the United States and the earthquake in Mexico.
Larger rival PepsiCo (PEP) announced its fiscal 3Q17 results earlier this month. Its revenue rose 1.3% to $16.2 billion, mainly driven by higher pricing. Coca-Cola (KO), which is also announcing its 3Q17 results on October 25, 2017, is expected to report revenue of $8.7 billion. This estimate reflects a year-over-year fall of 18.0%, which is expected to be due to structural changes, mainly the refranchising of its bottling operations.
We’ll look at Dr Pepper Snapple’s margins in the next part of this series.