KDP

As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at beverages, alcohol, and tobacco stocks, starting with Keurig Dr Pepper (NASDAQ:KDP). These companies' performance is influenced by brand strength, marketing strategies, and shifts in consumer preferences. Changing consumption patterns are particularly relevant and can be seen in the rise of cannabis, craft beer, and vaping or the steady decline of soda and cigarettes. Companies that spend on innovation to meet consumers where they are with regards to trends can reap huge demand benefits while those who ignore trends can see stagnant volumes. Finally, with the advent of the social media, the cost of starting a brand from scratch is much lower, meaning that new entrants can chip away at the market shares of established players. The 13 beverages, alcohol, and tobacco stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 1% while next quarter’s revenue guidance was 2.2% above. While some beverages, alcohol, and tobacco stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 3.8% since the latest earnings results. Born out of a 2018 merger between Keurig Green Mountain and Dr Pepper Snapple, Keurig Dr Pepper (NASDAQ:KDP) is a consumer staples powerhouse boasting a portfolio of beverages including sodas, coffees, and juices. Keurig Dr Pepper reported revenues of $7.31 billion, up 75.6% year on year. This print exceeded analysts’ expectations by 0.9%. Despite the top-line beat, it was still a mixed quarter for the company with a beat of analysts’ EPS estimates but full-year revenue guidance meeting analysts’ expectations. Keurig Dr Pepper achieved the fastest revenue growth in the group. Unsurprisingly, the stock is up 3.4% since reporting and currently trades at $31.81. Is now the time to buy Keurig Dr Pepper? Access our full analysis of the earnings results here, it’s free. Founded in 2004 followed by a 2021 IPO, The Vita Coco Company (NASDAQ:COCO) offers coconut water products that are a natural way to quench thirst. Vita Coco reported revenues of $216.2 million, up 28.1% year on year, outperforming analysts’ expectations by 3%. The business had a stunning quarter with a beat of analysts’ EPS and gross margin estimates. Vita Coco pulled off the highest full-year guidance raise among its peers. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 19.7% since reporting. It currently trades at $59.80. Is now the time to buy Vita Coco? Access our full analysis of the earnings results here, it’s free. With its proprietary MetaPlus formula as the basis for key products, Celsius (NASDAQ:CELH) offers energy drinks that feature natural ingredients to help in fitness and weight management. Celsius reported revenues of $817.9 million, up 10.6% year on year, falling short of analysts’ expectations by 6.2%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates. Celsius delivered the weakest performance against analyst estimates of the whole group. Interestingly, the stock is up 7.8% since the results and currently trades at $31.42. Read our full analysis of Celsius’s results here. With a history that goes back more than a century, PepsiCo (NASDAQ:PEP) is a household name in food and beverages today and best known for its flagship soda. PepsiCo reported revenues of $24.18 billion, up 6.4% year on year. This result beat analysts’ expectations by 0.8%. Aside from that, it was a mixed quarter as it recorded gross margin in line with analysts’ estimates. The stock is down 1.5% since reporting and currently trades at $140.38. Read our full, actionable report on PepsiCo here, it’s free. Founded in 1847, Philip Morris International (NYSE:PM) manufactures and sells a wide range of tobacco and nicotine-containing products, including cigarettes, heated tobacco products, and oral nicotine pouches. Philip Morris reported revenues of $11.19 billion, up 10.4% year on year. This print surpassed analysts’ expectations by 5.5%. It was a very strong quarter as it also logged a beat of analysts’ EPS estimates and gross margin in line with analysts’ estimates. Philip Morris scored the biggest analyst estimate beat among its peers. The stock is flat since reporting and currently trades at $187.95. Read our full, actionable report on Philip Morris here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

Download the Complete Report Here Key Takeaways: Strong topline growth and continued education-channel rebuilding were offset by slower-than-expected manufacturing efficiency at the existing Arps facility. BRFH reported 2Q26 revenue of $4.7 million, up 190% y/y from $1.6 million but down 16% sequentially from $5.6 million in 1Q26 and approximately 9.5% below the low end of $5.2 million guidance. Arps Dairy contributed $3.2 million, including $2.9 million from raw and processed milk, while frozen beverage and food revenue, consisting primarily of legacy Barfresh products, increased 9% y/y to approximately $1.8 million. Consolidated growth remained heavily acquisition-driven, with milk representing roughly 62% of quarterly revenue and core Barfresh recovery not yet fully reflected in reported results. Arps continues to provide supply continuity, while new district wins and returning education customers are expected to contribute more meaningfully with the 2026-27 school year. The principal 2Q pressure point was therefore production, where a slower and more costly manufacturing ramp weighed on gross margin and adjusted EBITDA recovery. Profitability remained pressured by manufacturing inefficiencies, but improving throughput and a more favorable product mix support sequential recovery in 2H26. Gross margin declined to negative 3.2% in 2Q26 from 31.1% in 2Q25 and approximately 18% in 1Q26, while adjusted EBITDA fell to a $1.2 million loss from a $600,000 loss a year ago. The pressure reflected startup costs, equipment limitations and lower than planned productivity at the existing Arps facility, with the impact extending into legacy Barfresh production. Management indicated that repairs and process improvements are improving throughput and yields, while a greater mix of higher margin education products should provide additional support as the 2026-27 school year ramps. Together, these factors support management’s expectation for adjusted EBITDA to improve to a $0.5 million loss to breakeven in 2H26. Arps has restored supply continuity for BRFH, but scaling owned production has required more investment and operational work than initially anticipated. As more Barfresh volume shifted in-house, operating the facility at the required production levels highlighted additional equipment and infrastructure needs that had not been apparent before the acquisition. BRFH therefore moved ice cream production out to prioritize its core smoothie portfolio, while repairs, equipment servicing and process refinements have since improved throughput and yields. Management indicated that a significant portion of the corrective work has already been completed and that remaining requirements at the existing facility should be relatively modest, with focus increasingly shifting to Defiance. Guidance revision quantifies the impact of the slower manufacturing ramp and makes operational efficiency an important 2H26 focus. 2026 revenue guidance was reduced to $23 to $26 million from $28 to $32 million, while adjusted EBITDA guidance was reduced to a loss of $1 million to $2 million from positive $3.2 to $3.8 million. At the respective midpoints, this represents a $5.5 million reduction in expected revenue and an approximately $5.0 million reset in adjusted EBITDA. Management attributed most of the EBITDA revision to ~$1.8 million of higher Arps processing costs, $0.8 million from the loss of the ice cream mix business and $0.8 million of higher material costs, with another $1.2 million tied to delayed legacy Barfresh revenue recovery and unrealized freight and storage synergies. Street’s 2026 revenue estimate of $22.9 million (source: TIKR) sits just below management’s $23 to $26 million guide, suggesting expectations are already relatively conservative; delivery within the range could support upward estimate revisions. Management’s breakdown of the guidance revision indicates that the downgrade is primarily tied to manufacturing efficiency, integration timing and delayed cost savings, making cost per case, throughput and gross margin recovery important operating markers through 2H26. The revised outlook still supports meaningful sequential improvement in 2H26, while education growth and manufacturing progress provide the foundation for continued growth into 2027. With 1H26 revenue of $10.3 million, management’s 2026 guidance implies $12.7 to $15.7 million of revenue in 2H26, with sequential improvement expected in both 3Q26 and 4Q26 as new school districts and returning customers ramp. Management also expects 2H26 adjusted EBITDA to improve to a loss of $0.5 million to breakeven from a $1.46 million loss in 1H26, supported by higher throughput, better cost absorption and a more favorable mix of core Barfresh products. Looking into 2027, Street estimates call for revenue of $29.2 million and adjusted EBITDA of negative $2 million (source: TIKR), implying ~28% revenue growth versus 2026 estimates and a modest improvement in adjusted EBITDA from negative $2.4 million. The revenue growth and modest EBITDA improvement reflect expectations for broader education rollouts, continued customer recovery and gradual improvement in manufacturing economics, while the lower margin Arps milk business remains relatively stable. Education channel momentum continues to build, with new district wins and customer reactivations supporting a stronger 2H26 setup. Several recently won districts began serving BRFH products during the 2025-26 school year and are expected to expand across all locations in the 2026-27 school year, while additional education wins are expected as remaining bids close. BRFH is also reengaging customers that removed products from menus following prior supply disruptions. The timing of these wins helps explain why frozen beverage and food revenue increased 9% y/y in 2Q26, as much of the first half still reflected purchasing decisions made during the prior school year. Management expects incremental 2H26 growth to be driven primarily by higher margin Barfresh products, while the Arps milk business remains relatively stable, supporting a more favorable revenue mix as school-year orders ramp. BRFH’s broker-led commercial model continues to support customer recovery while keeping costs well controlled. Selling, marketing and distribution expense declined 12% y/y to $561,000 in 2Q26 from $634,000, with sales and marketing expense down 28% to $256,000 as the company increasingly relied on brokers to communicate improved supply reliability and rebuild relationships with school districts. Single-serve products are also reducing equipment maintenance requirements in the education channel, providing operating leverage as volume scales. Storage and outbound freight expense increased to $305,000 from $276,000, reflecting the delivery requirements of processed milk, but the broader commercial cost structure remains relatively lean. This should support better operating leverage as higher margin Barfresh volume becomes a larger share of the mix, provided manufacturing efficiency continues to improve. The 44,000-square-foot Defiance facility remains the central strategic catalyst for BRFH’s transition to normalized production economics. BRFH is targeting partial commissioning of core products by year-end 2026, with remaining products expected to follow shortly thereafter. The facility is designed to provide greater throughput, improved production flexibility and more efficient unit economics than the existing plant, directly addressing the equipment reliability and processing constraints that affected 2Q26 results. The company also has a $2.4 million government grant available for qualifying equipment purchases. While the existing Arps facility has already improved supply continuity and reduced reliance on third-party manufacturers, successful commissioning of Defiance should be the more important driver of margin normalization and capacity expansion heading into 2027. The transition will also require careful production sequencing, with the existing facility lease running through September 30 and partial commissioning at Defiance targeted by year-end. Operating expense discipline provided some offset to manufacturing pressure, although higher G&A and financing costs weighed on overall profitability. Selling, marketing and distribution expense declined 12% y/y to $561,000 from $634,000 and was down from approximately $697,000 in 1Q26, reflecting greater use of the broker network and lower equipment-related costs. G&A increased 18% y/y to $794,000 from $673,000, primarily due to higher personnel, recruiting and administrative costs associated with Arps Dairy, while total operating expenses remained broadly flat y/y at $1.37 million. Net loss widened to $1.86 million from $880,000 y/y, with interest expense increasing to $344,000 from $12,000 as acquisition and facility financing became a larger part of the cost structure. Working capital is being positioned for the new school year, with inventory supporting production readiness as education volumes ramp. Inventory increased approximately 30% from year-end 2025 to $2.16 million, driven by raw materials and packaging rising to $1.17 million from $684,000, while finished goods remained broadly stable at approximately $1.0 million. This mix suggests the build is primarily supporting higher production rather than reflecting an accumulation of unsold finished product. Management also indicated that inventory has continued to build through the summer and that current internal capacity, supplemented by co-manufacturers, is sufficient to support existing, returning and newly won school business. Given the supply interruptions experienced last year, maintaining this production buffer should help BRFH convert improving education demand into more consistent revenue. Liquidity remains supported by receivables financing and planned funding sources as the manufacturing build progresses. BRFH ended June with $324,000 of cash and $1.09 million of trade receivables, while operating cash use increased to $3.05 million in 1H26 from $1.58 million a year ago as the company absorbed integration costs, built inventory and reduced trade payables. Receivables facilities provide an additional liquidity buffer, with approximately $3.58 million of borrowing availability at quarter end, subject to eligible collateral. Converting the back-to-school inventory build into sales and receivables, while securing planned financing for Defiance, remains an important balance-sheet consideration through the remainder of 2026. The March convertible financing provides BRFH with funding flexibility, although interest cost and potential dilution remain considerations. BRFH raised $7.5 million through senior convertible notes and used a portion of the proceeds to repay the existing mortgage, leaving the Defiance property unencumbered and available to support planned property-backed financing. The notes carry a 10% coupon during the first 12 months and are convertible at $2.90 per share, while investors also received approximately 2.35 million warrants exercisable at $3.20. Interest expense increased to $344,000 in 2Q26 from $12,000 a year ago, reflecting the higher financing burden. Management does not currently plan an equity raise and continues to prioritize mortgage and equipment financing; successful execution of that plan would help limit incremental dilution as BRFH completes the Defiance build. Disclaimer: Exec Edge does not publish proprietary estimates, ratings, price targets, or investment recommendations. The valuation discussion below is illustrative only and is based on company filings, management commentary, and third-party data and estimates. It does not constitute a recommendation, price target, rating, or prediction of future pricing. Stock has reacted negatively to the latest earnings print, but our analysis suggests BRFH’s current valuation increasingly discounts the near-term operating pressure reflected in the guidance reset, while the medium to long-term opportunity from education growth and vertical integration remains intact. At $1.30 per share and an approximately $21 million market capitalization, BRFH trades at 0.93x 2026E P/Sales. The selloff reflects the slower manufacturing ramp and reduced 2026 outlook, while the longer-term education opportunity and strategic rationale for vertical integration remain intact. Importantly, the Street estimate sits slightly below the low end of management’s $23 to $26 million 2026 revenue guidance, suggesting current expectations are already relatively conservative. Delivery within the guidance range, particularly toward the upper end, could support upward estimate revisions and strengthen confidence in the medium to long-term growth and margin recovery trajectory. A return toward BRFH’s historical valuation range highlights meaningful rerating potential as execution improves. The stock has de-rated and currently trades well below its three-year peak of 4.5x NTM P/Sales. Applying a 3.0x P/Sales multiple, approximately one-third below the historical peak, to the $22.9 million 2026E Street revenue implies an illustrative market capitalization of approximately $68 million, or roughly $4.2 per share, while 2027E Street revenue of $29.2 million provides additional forward growth support. However, the path to rerating remains contingent on execution across key operating milestones, including education revenue growth through the 2026-27 school year, gross margin recovery, improved efficiency at the Arps facility, progress toward the 2H26 adjusted EBITDA target, and successful commissioning of the Defiance facility. Relative valuation has also become compelling, with BRFH trading at a greater than 40% discount to peers. BRFH’s 0.93x 2026E P/Sales multiple compares with a peer average of 1.58x, representing an approximately 41% discount. Applying the peer average to the $22.9 million 2026E Street revenue estimate sourced from TIKR implies an illustrative equity value of approximately $36 million, or roughly $2.2 per share. This framework assumes only convergence toward the peer average, with further rerating potential if BRFH delivers within management’s revenue guidance, demonstrates sequential margin improvement, and executes on the Defiance transition, supporting the medium to long-term growth and margin recovery thesis. Read Exec Edge’s Initiation on Barfresh Food Group Here Subscribe to our Weekly Newsletter to Receive All Research Contact: Executives-Edge.com [email protected] The post Barfresh Reports Topline Growth & Continued Education Recovery – Quarterly Update Report appeared first on ExecEdge.

The stock has not been priced this richly against its own sales at any point in a decade, and part of the earnings growth that price pays for comes from an exchange-rate swing rather than from the operation. Coca-Cola (KO) closed at $88.82 on Aug 18, 2026, effectively at its 52-week high after a 30.6% total return over the past year. Nothing in the operation is breaking, which is what makes the risk here hard to see. The price now pays for peak profitability, and the most recent step up in earnings growth came partly from outside the operation. The company's $50.1 billion of revenue over the trailing twelve months is priced at 7.6 times sales. That multiple has run between 4.3 and 7.1 over the past decade, so the stock is now above the top of its own ten-year range. The stretch is measured against its own history, not against any peer. A price set there is not asking the business to accelerate; it is asking it not to stumble. Net margin over the trailing twelve months is 28.6%, the highest in at least five years and well above its 24.9% three-year average. Management attributes the comparable operating margin expansion in Q2 2026 to underlying expansion and currency tailwinds together. The company's full-year 2026 guide carries an approximate 3-point currency tailwind inside comparable earnings per share growth of 9% to 10%. Foreign exchange ran the other way for years before it turned. Earnings growth built in the operation and earnings growth handed over by an exchange rate are not the same asset, a distinction the Trefis High Quality Portfolio makes when it looks for strong margins alongside sustainable revenue growth in its holdings. Worldwide unit case volume grew 5% in Q2 2026, and the company names what made the quarter run hot: an easier prior-year comparison, favorable weather in certain markets, and a FIFA World Cup activation that helped carry Trademark Coca-Cola to its strongest volume growth in 17 years, excluding the pandemic recovery. On a two-year average, that worldwide volume line runs 2%. Adding new drinkers costs something: comparable operating income in Asia Pacific declined in Q2 2026 even as volume grew across all of its operating units, and management puts that decline down to widening the consumer base across income levels, an effort that includes affordability initiatives and cold drink equipment. Volume built for the long term is being paid for out of segment profit. Management guides 2026 organic revenue growth to about 5%, below the 6% organic growth reported for Q2 2026, and says the second half of 2026 cycles a higher comparison, with six fewer days in the fourth quarter. The deceleration is scheduled, not the risk. What is unsettled is whether it arrives with mix improving or with more investment behind it. None of this describes a company in trouble; it describes a stock the market has barely marked down at any point in the past year, when the deepest peak-to-trough drop reached just 7.9%. How wide a range the options market is pricing over the next twelve months is the cheapest read on whether anyone else is worried yet. The risks here are not existential; they sit in one multiple, one margin cycle and one investment cycle, and a holder owns all three. Spreading that defensive intent across the Trefis High Quality Portfolio is a different exposure from paying the top of a decade-long range on sales for one franchise. That portfolio has a track record of outpacing the three major indices - the S&P 500, S&P Mid-cap, and Russell 2000.

Keurig Dr Pepper’s second quarter was marked by robust revenue growth, powered by the successful integration of JDE Peet’s and continued strength in U.S. Refreshment Beverages. Management credited double-digit sales gains in carbonated soft drinks, energy, and sports hydration as key drivers, with new launches like Dr Pepper Zero Sugar and Bloom Pop contributing to share gains. CEO Tim Cofer highlighted the importance of executional discipline and the benefits of a consolidated sales force in delivering these results. However, the company faced margin pressure, largely due to higher input costs in the U.S. Coffee segment. Is now the time to buy KDP? Find out in our full research report (it’s free). Revenue: $7.31 billion vs analyst estimates of $7.24 billion (75.6% year-on-year growth, 0.9% beat) Adjusted EPS: $0.57 vs analyst estimates of $0.54 (6.2% beat) The company reconfirmed its revenue guidance for the full year of $26.15 billion at the midpoint Operating Margin: 8.6%, down from 21.6% in the same quarter last year Market Capitalization: $40.23 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Christopher Carey (Wells Fargo) asked about the drivers behind U.S. Refreshment Beverages growth and the outlook for volume versus pricing. CEO Tim Cofer highlighted continued category strength, market share gains, and balanced contributions from both owned and partner brands. Peter Galbo (Bank of America) pressed for clarity on the timing of the Global Coffee Co. CEO appointment. Cofer emphasized the importance of finding the right leader and stated the process is on track, prioritizing quality over speed. Lauren Lieberman (Barclays) questioned the balance between pricing actions and restoring volume trends in coffee. CFO Anthony DiSilvestro explained that easing input costs should support more favorable pricing dynamics and margin recovery in the second half. Peter Grom (UBS) inquired about the causes of U.S. Coffee underperformance and improvement expectations. Cofer pointed to category softness, unfavorable mix, and inventory headwinds, but expressed confidence in a second-half recovery as cost pressures abate. Robert Ottenstein (Evercore) asked about the Bloom brand's partnership and long-term plans. Cofer detailed the 36% stake in Nutrabolt and the strong collaborative relationship, positioning Bloom for continued mutual growth. Looking forward, the StockStory team will be monitoring (1) the pace and scale of cost synergy realization from the JDE Peet’s integration, (2) recovery in U.S. Coffee segment profitability as lower-cost inventory and tariff relief materialize, and (3) continued share gains and innovation-driven growth in U.S. Refreshment Beverages—especially in energy and prebiotic sodas. Progress on the CEO search for Global Coffee Co. and execution of separation milestones will also be key markers. Keurig Dr Pepper currently trades at $29.52, down from $30.75 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members). ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively. Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 8:00 a.m. ET Vice President of Investor Relations - Chethan Mallela Chief Executive Officer - Timothy Cofer Chief Financial Officer - Anthony DiSilvestro Operator: Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Keurig Dr Pepper's Earnings Call for the Second Quarter of 2026. This conference call is being recorded and there will be a question and answer session at the end of the call. I would now like to introduce Chethan Mallela, Vice President of Investor Relations at Keurig Dr Pepper. Please go ahead. Chethan Mallela: Thank you, and hello, everyone. Earlier this morning, we issued a press release detailing our second quarter 2026 results, which we will discuss on today's call. An accompanying slide presentation is available and can be viewed in real time on the webcast. Before we get started, I'd like to remind you that our remarks will include forward-looking statements, which reflects KDP's judgment, assumptions and analysis only as of today. Our actual results may differ materially from current expectations based on a number of factors affecting KDP's business. Except as required by law, we do not undertake any obligation to update any forward-looking statements discussed today. For more information, please refer to our earnings release and the risk factors discussed in our most recent Form 10-K and our latest 10-Q, which will be filed with the SEC in the coming days. Consistent with previous quarters, we will be discussing our Q2 performance on a non-GAAP adjusted basis, which reflects constant currency growth rates and excludes items affecting comparability. Definitions and reconciliations to the most directly comparable GAAP metrics are included in our earnings materials. Here with us today to discuss our results are Keurig Dr Pepper's Chief Executive Officer, Tim Cofer; and Chief Financial Officer, Anthony DiSilvestro. I'll now turn it over to Tim. Timothy Cofer: Thanks, Chethan, and good morning, everyone. In Q2, we delivered another quarter of strong results. We demonstrated healthy momentum across the majority of our business, led by U.S. Refreshment Beverages and our performance exceeded our expectations. Halfway through the year, we remain on track to achieve the goals we set at the beginning of 2026, delivering our low double-digit EPS growth guidance, integrating and activating JDE Peet's and hitting key separation milestones. While we expect the external environment to remain dynamic in the back half, our plans, executional discipline and year-to-date performance reinforce our confidence in delivering our 2026 guidance while setting up for a successful separation in early 2027. Before turning to our results, let me begin with an update of our transformation work. We successfully closed the acquisition of JDE Peet's in early April and on day 1, stood up an interim operating model that is purpose-built to support both near-term delivery and separation readiness. The model embeds distinct responsibilities and clear accountability across our KDP enterprise, beverage operating unit and coffee operating unit leadership teams, all of which are functioning well as we advance our integration and separation priorities. Let me share some key highlights from our work. We've quickly begun to capture Coffee Co. cost synergies with initial savings flowing through in the second quarter and have also commenced work to offset anticipated Beverage Co. dis-synergies. We've now consolidated our U.S. customers to an integrated sales force and single invoice for the joint Keurig and Peet's portfolio with the transition completed on schedule and without disruption. We've largely finalized our post separation organizational structures, including across critical operational, commercial and finance functions. We've made significant progress establishing IT and financial reporting readiness for each future company and we've begun deleveraging our balance sheet following the JDE Peet's close, reducing pro forma management leverage to 4.4x at quarter end. This was slightly better than our expectations, and we remain on track to end the year with leverage of 4.1x. In addition, our search for the future CEO of Global Coffee Co. is well underway. The Nominating and Governance Committee of our Board of Directors is leading the process and has engaged a top-tier executive search firm to help identify and evaluate candidates. The role has already attracted considerable interest and we're confident we will recruit the right CEO to shape and execute Global Coffee Co.'s value creation strategy. Let's now turn to our second quarter results. Total net sales grew 75%, inclusive of the JDE Peet's acquisition impact. Net sales for legacy KDP increased at a high single-digit rate with both net price realization and volume mix contributing. We translated our top line improvement into significant profit growth with consolidated operating income up over 40% and EPS increasing 16% to $0.57. Overall, our second quarter was ahead of our expectations, primarily driven by upside in our JDE Peet's and U.S. Refreshment Beverages segments, including some timing benefits that Anthony will discuss. We also delivered solid results in KDP International, partly offset by subdued trends in U.S. Coffee. Now let me walk through each segment in more detail. I'll start with U.S. Refreshment Beverages. Segment net sales and operating income each grew at a double-digit rate in the second quarter, reflecting strength across both our core portfolio and newer growth platforms. Our largest business, carbonated soft drinks continued to grow nicely. Category trends were healthy with consumers responding to the compelling value proposition and significant commercial activity from major players. We gained market share in the quarter led by Dr Pepper. The brand's Zero Sugar platform sustained its momentum, growing retail sales nearly 30% and gaining more share than any other trademark in the Zero Sugar space driven by increasing household penetration. This reflected the benefits of marketing support, increased distribution and greater display activity, and we will continue to deploy these levers to drive further expansion. Dr Pepper franchise trends were also fueled by our Creamy Coconut limited-time offering, which launched in April. The response to the innovation has been positive with the distribution build, display support and most importantly, consumer sell-through, all tracking well ahead of Creamy Coconut's prior market run. Canada Dry also had a robust quarter with retail sales increasing at a double-digit rate. Our Fruit Splash platform continued to serve as a sustainable growth driver with this year's highly incremental strawberry launch performing well. The brand was further supported by our impactful marketing investments, including the recent Dry Time is My Time campaign. And Bloom Pop also contributed to our CSD growth. The brand is scaling rapidly, driven by distribution expansion and compelling innovation and was the leading market share gainer in prebiotic CSDs in the second quarter. Moving to energy drinks. Our portfolio achieved a key milestone, crossing the 9% market share threshold in the quarter. Bloom and GHOST were 2 of the top-performing trademarks in the category, underscoring their meaningful consumer resonance and reflecting each brand's great tasting products, authentic positioning and social media savvy. Growth also came from high-quality frontline execution to expand distribution points and cooler penetration as well as compelling innovation such as Bloom Crisp Apple and Summer Splash and the GHOST 7UP limited time offering. C4 recently introduced updated packaging across its performance and ultimate lineups with clearer caffeine and benefit communication, bolder flavor cues and a simplified visual system. This refresh is designed to improve shelf presence and make the portfolio easier to shop and early results are encouraging with a double-digit sales lift and significant velocity increases in geographies where it's present. We expect brand momentum to build as the new packaging rolls out more broadly. Overall, we continue to view our energy portfolio as advantaged with a long runway for each of our brands and good visibility to our double-digit market share goal. Beyond energy, we also experienced meaningful traction in other high-growth areas of the segment like sports hydration, coconut water and seltzer water. All in, our U.S. Refreshment Beverages business continues to enjoy strong momentum, and we expect this segment will remain a key growth engine for KDP over the balance of 2026 and beyond. Moving to Coffee. We delivered solid results at the enterprise level, but experienced differing dynamics between our U.S. Coffee and JDE Peet's segments. Turning first to U.S. Coffee. Second quarter performance was relatively consistent with our first quarter as net sales declined in the low single digits and operating income declined 25%. Year-over-year profit pressure was primarily driven by the impact of significantly higher input costs. As we signaled last quarter, this was due to our hedging approach and inventory positioning, which caused elevated green coffee costs and tariffs to flow through our second quarter P&L. While we always anticipated subdued segment performance in the quarter, the magnitude was larger than we initially estimated. Top and bottom line results were impacted by single-serve category volume declines and unfavorable portfolio mix, which reflected increased consumer caution and value seeking behavior. Despite these dynamics, we made progress across the business. Notably, brewer shipments returned to growth, supported by our Great Coffee Without the Grind Keurig Marketing campaign, and we expect further improvements over the balance of the year. In coffee products, our licensed McCafé K-Cups grew retail sales at a mid-single-digit rate and expanded market share reflecting high quality commercial execution and effective marketing. Our cold coffee La Colombe ready-to-drink platform also drove outsized momentum, growing retail sales over 50% and gaining more than 1 point of market share, driven by distribution gains, increased display activity and strong velocity. Importantly, we continue to have line of sight to improving segment trends over the balance of the year. Our cost envelope will become more favorable as lower cost inventory and improving tariff impacts flow through the P&L. Our brewer business has started to inflect and should benefit from our commercial activity, and we're actioning plans to strengthen trends in pods and other coffee products. Ultimately, we believe our U.S. Coffee segment is beginning to turn a corner as we enter the back half, and we remain confident in its long-term growth potential. Moving to the JDE Peet's segment. Quarterly net sales were approximately $2.8 billion and operating income was $414 million. We delivered profitability ahead of our expectations, driven by a couple of factors. First, our teams executed well, particularly in navigating commodity volatility. We maintained pricing discipline as inflationary pressures began to ease, protecting profitability and preserving reinvestment flexibility. In addition, we generated healthy productivity savings through our Reignite the Amazing program, further enhancing operating income in the quarter. And second, the segment also benefited from favorable timing, which added to the profit upside. By brand, L'OR maintained its robust momentum, growing retail sales at a high single-digit rate. Brand performance was broad-based with particular strength in capsules and beans and was supported by our successful Destinations innovation platform and Awaken the Senses brand marketing campaign. Peet's was another contributor with retail sales increasing through a combination of pricing and distribution growth. The brand's innovation activity also resonated with consumers, including the launch of Peet's Middle Ground, a half caffeinated medium roast designed for the afternoon pick-me-up occasion, which achieved healthy on-shelf velocities. Another coffee segment highlight in the second quarter was the successful integration of JDE Peet's and our legacy Keurig business. The newly created coffee operating unit team has collaborated well, establishing integrated business plans, executing unified commercial programs and beginning to generate initial cost synergies, which are set to build over the balance of the year. In summary, we're pleased with JDE Peet's second quarter results and expect this business will be a significant contributor to our performance in 2026 and over the long term. And finally, our KDP International segment strengthened from the first quarter as we expected with net sales growing at a double-digit rate and operating income flat versus the prior year. Segment performance was balanced across our 2 key markets. In Mexico, pricing was a key driver, but our business also returned to volume growth as the impact of the beverage tax eased. Peñafiel ‘Ades and Twist platforms each grew retail sales at robust double-digit rates, driven by distribution expansion and in-store execution. Our teams also capitalized on sports enthusiasm through creative marketing activations featuring Squirt, Peñafiel Mineral Water and Clamato as the green, white and red of the Mexican flag. This activity contributed to healthy second quarter trends for each of these brands. Canada growth was similarly broad-based. Our cold beverage performance was driven by a combination of pricing and volume mix with robust trends across CSDs, alcohol alternatives and newer categories like energy and ready-to-drink tea. In Coffee, growth was led by price, though both pod and brewer shipments were also positive, underscoring the health of the Keurig ecosystem in Canada. Overall, we have momentum in our KDP International segment and expect the business to deliver solid results over the balance of the year. In closing, our second quarter results capped a successful first half of 2026. We exceeded our EPS expectations for the quarter, reinforcing visibility to our full year guidance. We closed the JDE Peet's acquisition and quickly advanced integration activities, including synergy work streams. And we made important progress on key separation milestones. While there is still meaningful work ahead in the back half, we are confident in our ability to deliver on our 2026 commitments while advancing preparations to establish 2 world-class stand-alone companies. And with that, I'll turn the call over to Anthony to walk through our financial results and outlook in more detail. Anthony DiSilvestro: Thanks, Tim, and good morning, everyone. Our second quarter results were driven by strong execution in a dynamic operating environment and incremental contribution from JDE Peet's. Consolidated net sales grew 74.6% in the quarter, reflecting the JDE Peet's acquisition, which closed on April 1. Excluding the JDE Peet's contribution, legacy KDP net sales grew 7.3% Growth for legacy KDP was balanced with net price realization contributing 4.2 percentage points and volume mix adding 3.1 points. By segment, legacy KDP's top line was led by double-digit increases in U.S. Refreshment Beverages and KDP International, partly offset by a low single-digit decline in U.S. Coffee. Consolidated gross margin was 46.5%, 860 basis points below the prior year, primarily due to the mix impact of adding JDE Peet's to the portfolio. Excluding the acquisition impact, gross margin contracted 210 basis points as elevated cost pressures more than offset the benefits of pricing and productivity. While gross margin for legacy KDP declined as a percent of sales, on an absolute basis, gross profit dollars increased 3.2%. SG&A as a percent of sales declined 400 basis points. Excluding the mix impact from JDE Peet's, SG&A leveraged 100 basis points, driven primarily by productivity savings and disciplined cost management. In total, Q2 operating income increased 42.9% and including the below-the-line impact from acquisition financing, EPS increased 16.3% to $0.57. Turning now to our segment results. U.S. Refreshment Beverages net sales increased 10%, driven by 6.5 percentage points of volume mix growth and 3.5 points of net price realization. Growth was broad-based, led by energy, CSDs, water and sports hydration. Segment operating income grew 11.9% as net sales growth and productivity savings more than offset cost inflation. Moving to Coffee. Our performance in aggregate was solid but varied across the segments, with pressure in U.S. Coffee counterbalanced by strong results for JDE Peet's. The divergence was primarily driven by operating factors, which I'll discuss shortly. However, I'd also like to highlight a reporting dynamic that affected segment comparisons in the quarter. With the closing of the acquisition at the beginning of April, the partner economics for Peet's K-Cups previously reported in U.S. Coffee shifted to the JDE Peet's segment. We have since integrated distribution and transitioned Peet's to a unified Keurig invoice. And as a result, the full sales and profit recognition for Peet's K-Cups will reside in U.S. Coffee going forward. These reporting shifts had an unfavorable impact on U.S. Coffee in Q2 and will be a benefit in the back half with the opposite effect on our JDE Peet's segment. Importantly, these changes are neutral at the KDP enterprise level. With that background, let's now discuss the specific trends in each of our Coffee segments. Starting with U.S. Coffee, second quarter net sales declined 3.2%, with volume mix driving an 8.2 percentage point decline. Pod shipments declined 11.6% on an as-reported basis and 8.3%, excluding the impact of the Peet's reporting shift. The decrease primarily reflected subdued category trends in the quarter. Brewer shipments increased 2.1%, returning to growth through impactful marketing and commercial activity as well as the benefit from lapping prior year retailer destocking. Net price realization contributed 5 percentage points to growth, driven by carryover pricing actions from 2025. Turning to profit. Segment operating income declined 24.7%, driven by continued cost pressure from green coffee inflation and tariff impacts. The volume mix decrease and increased marketing spending also played a role, partially offset by net price realization and productivity savings. While we continue to expect subdued segment results for the full year, our cost profile should improve in the coming quarters, and we have good line of sight to improving profit trends in the back half. Our JDE Peet's segment generated $2.8 billion in net sales and $414 million in operating income in the second quarter, exceeding our expectations. Segment profitability was primarily driven by favorable pricing net of cost inflation, along with robust productivity savings. The business also benefited from timing factors, including related to the recognition of derivative gains as well as some marketing phasing. Looking ahead, we expect continued healthy results for JDE Peet's over the balance of the year, particularly as synergies build in the second half. That said, we now believe our second quarter operating profit likely represents the high watermark for JDE Peet's quarterly earnings contribution in 2026 based on the timing benefits I just discussed as well as the impact of the Peet's K-Cup transition to U.S. Coffee in the back half. In our KDP International segment, both revenue and profit trends improved sequentially from the first quarter, consistent with our expectations. Net sales grew 12.4%, driven by 6.5 percentage points from volume mix gains and 5.9 points from net price realization. Segment operating income was flat versus the prior year. Benefits from net sales growth and productivity savings were offset by higher costs, including green coffee inflation and the Mexico beverage tax as well as increased marketing investments. Turning to the balance sheet and cash flow. We generated healthy free cash flow of $714 million in the second quarter, driven by strong EBITDA and good cash conversion, including improved working capital trends, particularly in inventory. We continue to target approximately $2.5 billion in free cash flow for the full year. Our cash generation supported our deleveraging goals with pro forma management leverage of 4.4x at quarter end, slightly better than our expectations. We continue to expect to end the year with management leverage of approximately 4.1x. Our capital allocation priorities remain unchanged. In the near term, we are focused on 3 areas: investing in our business, maintaining our current dividend and paying down debt, consistent with our commitment to investment-grade credit ratings for KDP, Beverage Co. and Global Coffee Co. Looking ahead, we expect each business to deleverage quickly, which will provide greater capital deployment optionality over the medium to long term. With that, let me close with our full year guidance, which we are reaffirming. For the total company, we expect net sales in a range of $25.9 billion to $26.4 billion, including an $8.5 billion to $8.7 billion contribution from JDE Peet's. We continue to expect legacy KDP to grow 4% to 6% in constant currency, but now see the high end of the range as most likely. On the bottom line, we are reaffirming our outlook for low double-digit constant currency EPS growth. This consists of an anticipated 6 to 7 percentage points contribution from the JDE Peet's acquisition and 4% to 6% constant currency growth for legacy KDP. Based on current rates, we continue to expect an approximately 1 percentage point FX tailwind to total company net sales and EPS growth for the full year. While our EPS outlook is unchanged, there are 2 new elements to highlight. First, during the second quarter, we completed the initial JDE Peet's purchase price allocation. This resulted in higher fixed asset depreciation expense for the acquired entity than we previously anticipated, and our guidance now incorporates an incremental 2% noncash expense headwind to 2026 EPS versus our prior view. Second, our outlook also now includes an anticipated onetime cash benefit from tariff refunds. On a net basis, we expect these 2 factors to largely offset, resulting in a neutral impact to our full year EPS outlook. Moving to below-the-line metrics, we are now assuming the following: interest expense of approximately $1.12 billion to $1.14 billion, an effective tax rate of approximately 22% to 23%, approximately 1.37 billion diluted weighted average shares outstanding, approximately $190 million in pretax coffee JV costs and convertible preferred P&L costs based on the security's approximately 8% proportionate share of earnings. In closing, we delivered a strong second quarter. Exiting the first half, we are well positioned to meet our full year commitments while also preparing KDP for its exciting next chapter. With that, I will turn the call back to Tim for closing remarks. Timothy Cofer: Thanks, Anthony. As said, we're pleased with our strong second quarter results, which are a testament to the capabilities and hard work of our global team. I want to recognize and thank our more than 50,000 colleagues from around the world for their contributions to our inaugural quarter as a newly combined organization. Spending time with our teams in Amsterdam and Boston has reinforced my passion, enthusiasm and confidence in the future Global Coffee Co. And I'm equally energized by the future Beverage Co. business, which continues to deliver outsized performance and is well positioned for stand-alone success. Indeed, our teams are executing with discipline across both coffee and beverages enabling KDP to deliver on our near-term objectives while making meaningful progress on integration and separation work streams. We have good momentum and well-calibrated plans for the balance of the year and look forward to a strong finish to 2026 while laying the groundwork for a separation in early 2027. And with that, we're now happy to take your questions. Operator: [Operator Instructions] The first question today comes from Chris Carey with Wells Fargo. Christopher Carey: I wanted to ask about the strength that you're seeing in the U.S. Refreshment business. Certainly, it continues to come in very strong. Can you help us understand the contributions of your underlying owned business, how partners are contributing to the business? And expectations going into the back half of the year. I'm mindful that the outlook for the higher end of the net sales ex currency, excluding JDE Peet's does imply a deceleration into the back half. U.S. Refreshment is obviously a key enabler of your total company growth. So I would just love to get a bit more sense of what's driving Q2, how you see the segment performing into the back half of the year and perhaps some construct for volume mix versus pricing? Timothy Cofer: Chris, yes, we feel very good about the performance of U.S. Refreshment Beverages. Again, here this quarter, you saw the double-digit top and bottom line performance. And that was led by a 6.5% increase in volume mix. When you look at the drivers of the strength of that volume mix performance, you start with CSDs, carbonated soft drinks, reflecting healthy category MSD type performance. And then on top of that, market share gains in our portfolio. I talked in the prepared remarks about continued strength of Dr Pepper, Zero Sugar, where we saw about a 30% growth on that platform, the Creamy Coconut LTO as well as Canada Dry and our Bloom Pop offering within prebiotic CSDs. So really strong performance there. Outsized growth in energy would be the second driver driven by the momentum we have, in particular, in both Bloom and GHOST and good early traction from the brand refresh of C4. Then you go to sports hydration, you see continued strong trends with our Electrolit offering. And finally, I'd point to improving still beverage performance led by Waters. So then to your question, that was the Q2 drivers. What about the balance of the year? We expect, quite honestly, these same drivers to support continued segment momentum. However, we will lap some tougher comps in the back half. And so we expect the magnitude of the growth, which was double digits so far this year to moderate a bit relative to H1. It will be another strong year performance in '26 and sustain the momentum into the separation. The second part of your question was around partners. And on that, I'd just say, look, you've heard us say we have a very flexible build-buy-partner model. It's been a core element of KDP's Refreshment Beverage strategy for years. It gives us the ability to meet evolving consumer needs while driving growth and profitability across our portfolio. And the benefits of this model were evident in our first half performance. And when you look at the contribution, both owned and partner brands each meaningfully contributed to the top and the bottom line. And I think you should expect the same going forward owned and partner brands will continue to play an important and complementary roles for KDP, and you'll see us remain committed to investing in both as part of our balanced growth strategy. Operator: The next question comes from Peter Galbo with Bank of America. Peter Galbo: Tim, I wanted to go back to your comments around the CEO search for Global Coffee Co. Obviously, a bit of a restart on the process. It seems like you're making good progress there. But maybe you could help us put a few more guardrails around timing of when we might expect an announcement. I don't know if it's by Q3. I think there's just a bit of concern in the market that any sort of further delay could potentially delay the spin. And so maybe you can just help to quell some of those concerns with a bit more finite time line. Timothy Cofer: Thanks, Peter. Yes, as said, the search for our future Global Coffee Co. CEO is well underway. And I would tell you it's progressing nicely. What are we looking for? It's a world-class executive with significant and relevant experience to this platform. Prior proven success, leading scaled global businesses, a strong consumer orientation, a track record of navigating complex market conditions and leading through change. Finally, we're looking for a leader that can build culture, a winning culture and really generate a lot of followership. I can tell you this role has attracted considerable interest from highly qualified candidates. And we're well on our way through the interview and assessment process. So we remain confident. We'll have a CEO in place with sufficient time to engage with the business, shape the strategy ahead of our targeted 2027 separation. I'd say the last thing is we will prioritize finding the right CEO. It's critical that we've got the right CEO to really unlock the full potential as a stand-alone company, and we're not going to compromise on quality in service of speed. But we're confident we can do all of this on the time line we've shared. Operator: The next question comes from Lauren Lieberman with Barclays. Lauren Lieberman: Given green coffee volatility and the prior pricing actions in '25, just like where do you believe you are in the pricing recovery cycle? Just wondering how we should think about the balance between protecting margins and then restoring volume trends over the next several quarters in coffee. And in the prepared remarks, Tim, I know you specifically mentioned plans to strengthen pods and coffee products in the second half. So in this context, I wanted to hear a little bit more about that. Timothy Cofer: Should we talk first a little about green coffee costs, Anthony, and then I can speak a little bit to pricing. Anthony DiSilvestro: Sure, absolutely. As you know, green coffee costs have been highly volatile in recent years, inflationary in '24 and early '25. Turning deflationary as we got into the latter part of '25 and early '26. And as you've seen, inflationary again in the recent weeks. And just as a reminder, we've talked about this before, there is a lag between those green coffee price movements and when we see it come through the P&L. In terms of the most recent upward move, it's primarily related to speculation about El Niño's potential impact on supply. And because of that, we think it's likely that the price could remain volatile until that situation evolves. And I'd say from a KDP perspective, our priority is to solve for the operational visibility. We're not sitting here trying to predict future C-price movements. And as a result, we typically forward hedge our commodity purchases. And there is that lag between coffee prices and when it hits the P&L and performance. In terms of looking ahead, I'd say in the second half, we have really good line of sight to improving coffee costs that will move into lower cost inventory as well as tariff impacts easing. So the cost position for us in the second half will become more favorable as we look ahead. Timothy Cofer: Yes. And then I'll just pick up broadly on your pricing question. I guess obviously, first, recognize pricing is a topic of high interest across CPG given the overall inflationary envelope we've all had to manage through. Our goal over time at KDP and Bev Co and Coffee Co is to grow sales through a sustainable balance of price, mix and volume. And I think you look at our Q2 print, and it's a testament to this objective. KDP, if you look at a legacy KDP, you see a growing volume mix of 3% and a price of 4%. So pretty well balanced supporting that total sales of 7%. You jump into coffee more specifically, no doubt, the first half benefited from carryover pricing, but that will be increasingly anniversaried in the back half. And so in addition, with the coffee cost basket easing, JDE Peet's has already implemented some pass-through of lower coffee prices in certain formats and regions. U.S. Coffee, Keurig and K-Cups model is less pass-through in nature and has some different cost savings that Anthony and I talked about in the prepared remarks. But we'll also look for opportunities to invest in value for our consumers in the balance of the year. Overall, as you take these factors together, we expect enterprise pricing will probably be less of a net sales contributor in H2 versus H1, primarily due to the coffee dynamics that I discussed. Operator: The next question comes from Peter Grom with UBS. Peter Grom: So I kind of wanted to follow up a little bit on Lauren's question and stick with coffee but maybe just more from like a U.S. Coffee standpoint. And I know coming into the quarter, it was expected to be under some pressure, but I think it still came in a bit below your expectations. So can you maybe unpack the weakness, why you think performance fell short? And as we look out to the balance of the year, I think you mentioned that you expect subdued top line with some improvement on profitability. Can you maybe just unpack what that looks like relative to what we saw here in the second quarter? Timothy Cofer: Sure, Peter. So if you elevate up to our new total coffee business, I think solid results, but different trends across JDE Peet's and U.S. Coffee. And U.S. Coffee is definitely under a bit of pressure. So the Q2 performance for U.S. coffee was similar to Q1. We knew the first half would be challenging given the elevated C-price impacting our P&L, and it was. And in addition, and I think more specifically to your question, the Q2 trends were further impacted by a coffee category slowdown and a bit of unfavorable mix shift to private label, along with some continued trade inventory headwinds on pods. Importantly, I'd say, as we look to the back half, we do remain confident that we'll see better trends for U.S. coffee in the second half and certainly over the longer term. In the near term, the input cost envelope is set to become more favorable in the back half, reflecting the timing of cost flow-throughs due to our hedging and inventory position. And we believe volume mix will start to improve as trade inventory dynamics in pods begin to normalize. And then in addition to that, we think we'll benefit from some good ROI to support our sustainable long-term growth initiatives around pod and brewer innovations that we've got loaded for the back half, our precision marketing campaign specifically driving Keurig brewer sales and incremental household penetration. And we believe we will be growing household penetration in the back half on Keurig brewers. So I think these initiatives will support both a category growth improvement and KDP share improvement as we go to the back half. So in aggregate, I do anticipate a subdued full year 2026 for U.S. Coffee, but a significantly improved second half. Operator: The next question comes from Robert Ottenstein with Evercore. Robert Ottenstein: I was just wondering if you could remind us about the Bloom brand. It really looks like a phenomenal brand that has broad shoulders. So can you remind us what your ownership stake is, how it hits your income statement? I know you do distribution. Do you do manufacturing? What is the long-term plan for the brand? Is there any possibility of buying it and gaining control? All those sorts of questions, again, really in the context of what an attractive brand this is? Timothy Cofer: We certainly share your view, Robert, on the attractiveness of the Bloom brand. And we have a tremendous relationship with Nutrabolt and the founders of Bloom. In fact, just last week, we had a meeting here in Dallas with both the Nutrabolt founder and Bloom founder. And we've got exciting plans for the back half and for '27 to continue to grow this brand. This brand, as you know, is what we call a bit of a female-forward brand. It's done a tremendous job in both active nutrition powders, in energy and in prebiotic sodas of attracting quite a following. There's a tremendous amount of social savvy there, excellent capabilities attract -- in developing winning flavors and our customer partners are giving us appropriate focus and attention in terms of distribution and through our DSD capability, a lot of incremental displays. So love the brand and see continued robust growth potential going forward. From an ownership standpoint, Bloom is part of the Nutrabolt organization where there's a strong ownership there. And we have a long-term partnership with Nutrabolt for that obviously covers both C4 and Bloom. And we own a 36% stake in Nutrabolt and actually have multiple board seats. So that's the ownership stake that you had asked about. And overall, I'd say we're just excited to continue to work very closely with Doss, the founder of Nutrabolt with Bloom's founder, and we're quite bullish on our ability to drive mutual value creation in the years to come. Operator: The next question comes from Robert Moskow with TD Cowen. Robert Moskow: I was intrigued by your comment about the joint business plans that are now -- have been taking place between Keurig and JDE Peet's. Can you give a little more detail on what they're able to do on a joint basis? I think the perception out there is that these are still 2 very separate geographic businesses. And then maybe drill in a little bit on the synergies. Originally, the expectation is that you could get some synergies in coffee procurement. I wanted to know, in this very volatile environment, is it still possible to get those synergies? Or are there any complexities that happen when coffee gets more volatile? Timothy Cofer: Good. I think I'll start, Anthony, on kind of the Keurig and Peet's combination benefits and then kick it over to you to talk more specifically on synergies. So we are already well underway in beginning to capture the benefits of bringing these two companies together. I'll let Anthony, as I said, talk more specifically on the cost synergy side. If you will, revenue synergy side, the biggest opportunity is here in the United States. This is the geography where you've got the biggest overlap between legacy Keurig Green Mountain and legacy Peet's brand. And the opportunity we've already got organizationally, we've moved to one team, right, under one leadership team. We've actually transitioned Keurig and Peet's to a single invoice and an integrated sales force. And that really will help us unlock these opportunities. We see opportunities for commercial investment, reinvesting some of the synergies that Anthony will talk to you about to fund high ROI marketing and promotions. We see coordinated programming opportunities for cross-portfolio marketing promotions variety packs. We see new formats when you think about the Peet's legacy Peet's business and the way that they participate across all formats and segments of coffee, there's opportunities for us to leverage that in our system. There's opportunities in cold coffee as you bring these two together. And then there's even opportunities, think about next-generation brewer. We've talked about Keurig Alta, and we have announced now that as part of the Keurig Alta, when we first go to market with that here in the coming months, we will offer both Keurig and Peet's Alta rounds as the consumable. So I can tell you our teams in Boston, Legacy Keurig and Emeryville, Legacy Peet's are already working together quite well. They're presenting joint plans to the customer and we think that can be an important unlock on the growth side. Do you want to talk cost? Anthony DiSilvestro: Sure. To add to Tim's comments, we remain very confident in the $400 million cost synergy program. In fact, the deal closed April 1, but we had teams across KDP, JDE Peet's and third-party consultants working on this well ahead of the acquisition close in terms of identifying and planning and assigning ownership for a number of work streams, and that work has only accelerated since the deal closed. The financial contribution in Q2, fairly modest. We certainly have line of sight to a building benefit in the second half and certainly as we move beyond 2026. In terms of breaking down the $400 million, there are a number of areas, Rob. One area you mentioned was procurement. And I would say that we see a sizable opportunity in procurement even with the current coffee volatility. And I would say even more so given what's happening in the marketplace. IT and SG&A is another significant area in terms of simplifying the organization, rationalizing some of the applications and systems and eliminating duplication. And then on the manufacturing and logistics, Tim referenced integration in North America that, in fact, has already happened in terms of bringing the distribution of pods together. We're on a single invoice that had Keurig already. So we're well underway and are confident in achieving the $400 million. Operator: The last question today comes from Filippo Falorni with Citi. Filippo Falorni: Can get a little bit more color on the energy drink category and your expectations there. You had a previous target of getting to double-digit market share. Maybe where you stand versus that target? And then bigger picture, how are you thinking the growth in the category is impacting coffee? We've obviously seen a lot of younger consumers shifting their caffeine intake into energy drink as a replacement for coffee. So maybe if you can talk about the interaction between those categories. and your perspective there would be great. Timothy Cofer: Sure, Filippo. So energy, we're big believers in energy. This is a fantastic category, a large category, $30 billion and one of the fastest-growing spaces in liquid refreshment beverage. I think there are multiple structural growth drivers that suggest that this growth won't end anytime soon. There are continued distribution point expansion opportunities. There's household penetration upside when you look at household penetration on energy relative to other LRB more developed categories. There are occasions that have yet to be fully fleshed out. There are cohorts, certainly, these days, the female consumer who has not only entered the category, but really a growing affinity and usage there. And there's channel diversity yet to be fully exploited. Obviously, the category was born and raised in C-store and it continues to feature prominently there. But there's a lot of upside in other channels and opportunities across large format and others. So bullish on the category. Then our position, confident in our position. We like our portfolio. We've really curated this over the last many years. We're gaining market share. We've got real scale now. Right now, on a run rate basis, Filippo, we're looking at a $1.5 billion net revenue, net sales business. If you look at what's driving our performance, I think this portfolio with authentic and distinctly positioned brands when you think about C4, Bloom, GHOST, Black Rifle, great tasting products, great innovation, strong commercial programming and then overlay the DSD capability that KDP brings to the party, strong frontline execution, driving distribution, driving display activity. I think the other thing to point out is we focus on the most attractive part of the energy category, which is Zero Sugar. That's our whole portfolio. And Zero Sugar is the outsized contributor to category growth. So really proud of what we've done. I would remind you that just about 4 years ago, we had less than a 1% market share. And as I mentioned in the prepared remarks here in Q2, we're a 9% share, just crossed the 9% share a few years later. And that puts us well on our way to my goal of a double-digit market share. And in fact, I would tell you in 15 major customers across the U.S., we've already crossed that double-digit threshold. The other part of your question was, are we seeing any sort of interaction between energy and coffee. And what I'd tell you is we monitor that potential shifting behavior very closely. And we have not seen any sustained share movement between coffee and energy. Now in any given year, the share shift from a, say, a panel data standpoint can lean one way or another. But if you look at it over the last 3 to 4 years, I would tell you the impact is roughly neutral. There are some years where energy is a net gainer. There are other years where coffee is a net gainer. And when you look at it in aggregate over the last many years, you see it broadly neutral. So we continue to like in our current portfolio that we've got leading and winning solutions to serve that energy and alertness need that consumers have, whether that's through energy drinks or through coffee. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Chethan Mallela for any closing remarks. Chethan Mallela: Thank you for the time and the attention this morning. I know it's a busy earnings day, and the IR team is around if you have any follow-ups. Have a great day. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Before you buy stock in Keurig Dr Pepper, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Keurig Dr Pepper wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $403,337!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,946!* Now, it’s worth noting Stock Advisor’s total average return is 958% — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 13, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Keurig Dr Pepper (KDP) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Get insights on thousands of stocks from the global community of over 7 million individual investors at Simply Wall St. Keurig Dr Pepper (KDP) is back on investor watchlists after second quarter 2026 results topped analyst expectations for adjusted earnings and net sales, and the company reaffirmed its full year outlook. The report highlighted growth in U.S. Refreshment Beverages and contributions from the JDE Peet's acquisition. U.S. Coffee trends were softer. This mix of segment outcomes is now central to how investors assess KDP. See our latest analysis for Keurig Dr Pepper. The latest results land after a mixed year in the market. Keurig Dr Pepper’s share price is up 9.52% year to date and 5.34% over 90 days, while the 1 year total shareholder return is slightly negative. This suggests improving momentum but a more muted long term experience for investors. If this earnings reaction has you thinking about where else capital could work, it may be a good time to broaden your search with 20 top founder-led companies The recent move in Keurig Dr Pepper stock sits between two stories. One points to earnings beats and an affirmed outlook. The other points to sentiment after a weaker 1 year return. Which does the current valuation reflect? The most followed narrative currently places Keurig Dr Pepper’s fair value at $34.94 per share compared with a last close of $30.37. This frames the stock as modestly discounted and puts the focus on what needs to go right to close that gap. Read the complete narrative. Want to understand why this fair value sits above today’s price? The narrative leans on faster growth, firmer margins and a future earnings multiple that assumes the coffee separation and beverage execution stay on track. Result: Fair Value of $34.94 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, you still need to weigh softer U.S. coffee trends, including net sales declines and tariff pressures, as well as execution risk around the planned coffee business separation. Find out about the key risks to this Keurig Dr Pepper narrative. The first narrative paints Keurig Dr Pepper as undervalued on fair value estimates around $34.94 per share. The market’s own P/E tells a different story. KDP trades at 22.6x earnings, above its fair ratio of 21.4x and above the global beverage average of 18.1x. That gap suggests investors already pay a premium relative to both the fair ratio and peers, even with a softer 1 year share price return. The question for you is whether the coffee separation and beverage growth story justify paying up today, or whether patience is the better margin of safety. See what the numbers say about this price — find out in our valuation breakdown. Given the mix of optimism around earnings and concern about softer segments, it makes sense to review the full picture and act promptly based on your own judgment with 2 key rewards and 1 important warning sign. If Keurig Dr Pepper has your attention, do not stop there. Broaden your watchlist now so you are not relying on a single stock story. Use the Simply Wall St screener to uncover other opportunities that match your goals. A few focused starting points can quickly sharpen where you put fresh capital. Target potential mispricings by scanning for companies that combine quality fundamentals with attractive valuations through the 50 high quality undervalued stocks. Strengthen your income stream by checking businesses that aim to pair robust fundamentals with yields around 5% or higher using the 9 dividend fortresses. Protect your downside by concentrating on companies assessed to have sturdier balance sheets and lower overall risk through the 78 resilient stocks with low risk scores. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include KDP. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Interested in Keurig Dr Pepper, Inc? Here are five stocks we like better. Keurig Dr Pepper exceeded second-quarter expectations, with consolidated sales up 74.6% to include JDE Peet’s and legacy KDP sales rising 7.3%. Adjusted EPS increased 16% to $0.57, while adjusted operating income grew more than 40%. U.S. Refreshment Beverages drove performance, with sales up 10% and operating income up 11.9%, supported by Dr Pepper, Canada Dry, Bloom and Ghost. U.S. Coffee remained pressured by lower pod volumes, higher coffee costs and tariffs, although management expects improvement in the second half. KDP reaffirmed its 2026 outlook and continues targeting an early 2027 separation of its beverage and coffee businesses. The company also remains on track for $400 million in JDE Peet’s cost synergies, approximately $2.5 billion in full-year free cash flow and low-double-digit constant-currency EPS growth. 2 Aluminum Stocks Poised for Big Tariff-Related Gains Keurig Dr Pepper (NASDAQ:KDP) reported second-quarter results that exceeded its expectations, supported by strong growth in U.S. Refreshment Beverages and an incremental contribution from its acquisition of JDE Peet’s, which closed April 1. Chief Executive Officer Tim Cofer said total net sales increased 75% in the quarter, including the acquisition, while legacy KDP sales rose at a high-single-digit rate. Adjusted operating income increased more than 40%, and adjusted earnings per share rose 16% to $0.57. → 3 Drone Stocks That Should Soar After the Summer Slump 5 Spin-Off Stocks That Could Reward Patient Investors in 2026 Chief Financial Officer Anthony DiSilvestro said consolidated net sales grew 74.6%, while legacy KDP sales increased 7.3%. Net price realization accounted for 4.2 percentage points of the legacy sales gain and volume mix contributed 3.1 points. U.S. Refreshment Beverages remained the company’s largest growth driver. Segment sales increased 10%, including 6.5 percentage points of volume-mix growth and 3.5 points from pricing. Segment operating income rose 11.9%, as sales growth and productivity savings more than offset cost inflation. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth Keurig Dr Pepper’s Split Plan Could Unlock Hidden Value Cofer said growth was broad-based across carbonated soft drinks, energy, water and sports hydration. Dr Pepper gained market share, supported by the Zero Sugar platform, which posted nearly 30% retail-sales growth, as well as the Creamy Coconut limited-time offering introduced in April. Canada Dry retail sales rose at a double-digit rate, aided by its Fruit Splash platform and Strawberry launch. The company’s energy portfolio crossed a 9% market-share threshold during the quarter. Cofer cited momentum in Bloom and Ghost, as well as early results from redesigned C4 packaging. He said KDP’s energy business is running at roughly $1.5 billion in net sales and remains positioned to reach its double-digit market-share target. → Jersey Mike's Serves Fresh Gains After IPO Stumble On the call, Cofer said the company expects refreshment-beverage growth to moderate in the second half as it laps more difficult comparisons, though he said the business should continue to generate strong results. Both company-owned and partner brands contributed meaningfully to first-half performance, he added. U.S. Coffee sales declined 3.2% in the second quarter, while segment operating income fell 24.7%. DiSilvestro attributed the profit decline primarily to higher green-coffee costs and tariff effects, alongside lower volume mix and higher marketing spending. Pod shipments declined 11.6% on a reported basis, or 8.3% excluding a reporting shift related to Peet’s K-Cups. Following the JDE Peet’s transaction, KDP shifted the recognition of Peet’s K-Cup sales and profit between segments. The shift negatively affected U.S. Coffee in the second quarter but is expected to benefit the segment in the second half, with no enterprise-level impact. Brewer shipments increased 2.1%, returning to growth with support from marketing and commercial activity, as well as easier comparisons against retailer destocking in the prior year. McCafé K-Cups recorded mid-single-digit retail-sales growth, while La Colombe ready-to-drink cold coffee sales increased more than 50%. Cofer said the U.S. coffee category slowed in the quarter, with a mix shift toward private label and continuing trade-inventory headwinds affecting pods. However, management expects improved second-half trends as lower-cost inventory flows through results, tariff impacts ease and pod inventory dynamics normalize. The JDE Peet’s segment generated approximately $2.8 billion in quarterly net sales and $414 million in operating income. Results were ahead of KDP’s expectations, driven by pricing net of cost inflation, productivity savings and favorable timing related to derivative-gain recognition and marketing phasing. DiSilvestro cautioned that the second quarter would likely represent JDE Peet’s high-water mark for quarterly earnings contribution in 2026, given those timing benefits and the shift of Peet’s K-Cup economics back into U.S. Coffee during the second half. KDP said it has begun capturing cost synergies from JDE Peet’s and remains confident in its previously identified $400 million cost-synergy program. The company has combined U.S. customer sales efforts and moved to a single invoice for the Keurig and Peet’s portfolio without disruption, according to Cofer. The company has also largely finalized post-separation organizational structures across operational, commercial and finance functions, and is advancing IT and financial-reporting preparations for the future beverage and coffee businesses. KDP continues to target an early 2027 separation. Management said its search for a Global Coffee Co. CEO is progressing and that it expects to have a leader in place with enough time to shape strategy before the planned separation. Cofer said the company would prioritize identifying the right executive rather than compromising on quality for speed. KDP generated $714 million of free cash flow during the quarter and ended the period with pro forma management leverage of 4.4 times, slightly better than its expectations. The company continues to target leverage of about 4.1 times by year-end and approximately $2.5 billion in full-year free cash flow. KDP reaffirmed its 2026 outlook for total net sales of $25.9 billion to $26.4 billion, including an $8.5 billion to $8.7 billion contribution from JDE Peet’s. Legacy KDP sales are expected to grow 4% to 6% in constant currency, with management now viewing the high end of that range as more likely. The company also maintained its forecast for low-double-digit constant-currency EPS growth. Its updated outlook includes an incremental 2% non-cash EPS headwind from higher-than-expected depreciation expense tied to the JDE Peet’s purchase-price allocation, which KDP expects to be largely offset by a one-time cash benefit from tariff refunds. Keurig Dr Pepper (NASDAQ: KDP) is a North American beverage company formed in July 2018 through the combination of Keurig Green Mountain and Dr Pepper Snapple Group. The company designs, manufactures, markets and distributes a wide range of hot and cold beverages and related equipment, combining Keurig's single‑serve coffee systems with a large portfolio of carbonated and noncarbonated drink brands. It operates a network of manufacturing, packaging and distribution facilities to supply retail, foodservice and e-commerce channels across its served markets. The company's product mix includes single‑serve coffee brewers and coffee pods under the Keurig brand as well as a broad assortment of branded beverages. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Keurig Dr Pepper Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Keurig Dr Pepper Inc. KDP has reported second-quarter 2026 results, with adjusted earnings and net sales topping the Zacks Consensus Estimate. Moreover, the top and bottom lines improved year over year.KDP reported adjusted earnings per share (EPS) of 57 cents in the quarter, beating the Zacks Consensus Estimate of 55 cents by 3.6% and improving 16.3% year over year. Bottom-line growth was supported by stronger operating income, although higher adjusted interest expenses, non-controlling interest and earnings allocated to preferred investors moderated the benefit.Net sales of $7.31 billion advanced 75.6% year over year on a reported basis and surpassed the Zacks Consensus Estimate of $7.17 billion by 2%. On a constant-currency basis, net sales increased 74.6%. Keurig Dr Pepper, Inc price-consensus-eps-surprise-chart | Keurig Dr Pepper, Inc Quote The quarterly performance was driven by U.S. Refreshment Beverages growth, the contribution from the JDE Peet’s acquisition and operating efficiency initiatives. KDP’s energy portfolio achieved 9% market share in the quarter, while the company continued advancing integration and separation efforts.KDP’s adjusted operating income increased 42.9% year over year to $1.48 billion, with the operating margin reaching 20.2%. Growth was supported by higher net sales, productivity savings and the JDE Peet’s acquisition, partially offset by inflationary pressures and higher SG&A expenses, including increased marketing investments.Shares of the Zacks Rank #3 (Hold) company have gained 7.9% in the past month compared with the industry’s 4.5% rise. Image Source: Zacks Investment Research U.S. Refreshment Beverages delivered net sales of $2.93 billion, up 10% year over year, driven by volume/mix growth of 6.5% and favorable net price realization of 3.5%. Adjusted operating income increased 11.9% to $874 million, helped by sales growth and productivity savings.The segment benefited from strength across energy, carbonated soft drinks, water and sports hydration categories. KDP highlighted healthy trends in core carbonated soft drinks led by Dr Pepper, Canada Dry and Bloom Pop.KDP’s U.S. Coffee segment reported net sales of $918 million, down 3.2% year over year. The decline reflected an 8.2% volume/mix decline, including the impacts of moving Peet’s K-Cup pod reporting into the JDE Peet’s segment, which more than offset 5% favorable net price realization.Adjusted operating income for U.S. Coffee declined 24.7% to $225 million, impacted by higher input costs, lower volume/mix and increased marketing expenses. Management noted visibility into improving segment trends in the second half of the year as cost pressures ease and commercial plans build.The JDE Peet’s segment generated net sales of $2.8 billion in the quarter following the acquisition’s completion on April 1. Adjusted operating income was $414 million, representing a 14.8% margin, with profitability supported by pricing discipline, productivity and timing.KDP noted that L’OR and Peet’s were standout performers, supported by innovation and marketing. The company also continued integration efforts with legacy Keurig, with additional synergies expected in the second half of the year.KDP International posted net sales of $664 million, up 19.6% year over year, with constant-currency sales growth of 12.4%, driven by volume/mix growth of 6.5% and favorable net price realization of 5.9%. Adjusted operating income was flat year over year at $155 million, supported by sales growth and productivity savings. As of June 30, 2026, Keurig’s cash and cash equivalents were $1.52 billion. The company had long-term obligations of $21.6 billion and total stockholders’ equity of $25 billion.The company generated $895 million in operating cash flow and $714 million in free cash flow in the second quarter. KDP also continued targeting a pro-forma management leverage ratio of 4.1X by the end of 2026 following the JDE Peet’s transaction. KDP has reaffirmed its 2026 outlook, expecting constant-currency net sales of $25.9-$26.4 billion and constant-currency adjusted diluted EPS growth in the low-double-digit range. The outlook includes 4-6% constant-currency net sales growth for KDP’s core business. The forecast also includes 4-6% adjusted EPS growth for the legacy business, along with incremental contributions from JDE Peet’s.Based on current exchange rates, foreign currency movements are expected to add one percentage point to sales and earnings growth in 2026. The Vita Coco Company Inc. COCO is the leading coconut water brand in the United States, leveraging its strong brand equity, expanding global presence and asset-light business model to capitalize on the growing demand for healthier hydration beverages. COCO currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The consensus estimate for Vita Coco’s current fiscal-year sales and earnings implies growth of 31.6% and 64.7%, respectively, from the year-ago reported figures. COCO has delivered a trailing four-quarter earnings surprise of 21.9%, on average.The Coca-Cola Company KO is a leading beverage company with a portfolio of 32 billion-dollar brands spanning sparkling beverages, water, sports drinks, dairy and value-added beverages. KO currently carries a Zacks Rank #2 (Buy).The Zacks Consensus Estimate for Coca-Cola’s current fiscal-year sales and earnings implies growth of 3.6% and 9.7%, respectively, from the year-ago reported figures. Coca-Cola delivered a trailing four-quarter earnings surprise of 4.6%, on average.Primo Brands Corporation PRMB is a leading North American branded beverage company focused on healthy hydration. It currently has a Zacks Rank #2. The Zacks Consensus Estimate for Primo Brands’ current fiscal-year sales indicates growth of 1.6% from the prior year’s reported levels. PRMB delivered a trailing four-quarter earnings surprise of 1.4%, on average. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Keurig Dr Pepper, Inc (KDP) : Free Stock Analysis Report CocaCola Company (The) (KO) : Free Stock Analysis Report Vita Coco Company, Inc. (COCO) : Free Stock Analysis Report Primo Brands Corporation (PRMB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance exceeded expectations driven by double-digit growth in U.S. Refreshment Beverages and the successful day-one integration of JDE Peet's. U.S. Refreshment Beverages strength was fueled by Dr Pepper Zero Sugar's 30% retail sales growth and the energy portfolio reaching a 9% market share milestone. U.S. Coffee faced significant bottom-line pressure due to a deliberate hedging strategy that caused elevated green coffee costs and tariffs to flow through the P&L. The JDE Peet's acquisition closed in April, with an interim operating model established to balance near-term delivery with 2027 separation readiness. Management attributed international growth to pricing and a volume recovery in Mexico as the impact of the beverage tax began to ease. Operational focus has shifted toward a 'Coffee Operating Unit' that consolidates U.S. sales forces and invoices for the Keurig and Peet's portfolios. Reaffirmed low double-digit EPS growth guidance for 2026, with legacy KDP growth now expected at the high end of the 4% to 6% range. U.S. Coffee is expected to 'turn a corner' in the second half as lower-cost inventory and easing tariff impacts improve the segment's cost envelope. The search for a Global Coffee Co. CEO is prioritized for quality over speed, with the goal of having a leader in place well before the early 2027 separation. Management expects enterprise pricing to be a smaller contributor to net sales in the second half due to coffee price pass-throughs and anniversarying prior actions. Deleveraging remains a priority, with a target to reduce management leverage to 4.1x by year-end 2026 to support future capital allocation flexibility. A 2% non-cash EPS headwind from higher-than-expected JDE Peet's depreciation is being offset by a one-time cash benefit from tariff refunds. The reporting of Peet's K-Cups shifted from U.S. Coffee to JDE Peet's in Q2 but will return to U.S. Coffee in the second half, creating temporary segment volatility. Management identified 'dis-synergies' associated with the upcoming Beverage Co. separation and has commenced work to offset these costs. Green coffee costs remain a risk factor due to volatility driven by speculation regarding El Niño's impact on global supply. Growth was led by a 6.5% increase in volume/mix, specifically from CSD share gains and outsized performance in the energy category. Management expects growth to moderate in the second half as the company laps tougher year-over-year comparisons. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. The search is 'well underway' with significant interest from high-qualified candidates; management will not compromise on quality for speed. Confidence remains that a leader will be in place with sufficient time to shape the strategy before the 2027 spin-off. The company is moving toward a sustainable balance of price, mix, and volume as carryover pricing from 2025 begins to anniversary. JDE Peet's has already begun passing through lower coffee prices in certain regions to maintain competitiveness. Management is confident in the $400 million cost synergy target, primarily through procurement, IT simplification, and logistics consolidation. The U.S. transition to a single invoice and integrated sales force for Keurig and Peet's was completed on schedule without disruption. Internal data shows the impact of energy drinks on coffee consumption is 'roughly neutral' over the last 3-4 years. Management views the energy category as having significant structural runway, particularly among female consumers and in non-C-store channels.