Keurig’s JDE Peet’s acquisition drives revenue
KDP’s third-quarter sales hit $7.34 billion, a 70.6% increase from a year earlier, because the JDE Peet’s acquisition completed in April added $2.65 billion to its quarterly revenue. I find the acquisition the clear driver of these results. The existing U.S. coffee business, which includes Keurig brewing systems and K-Cup pods, reported a more modest 2.7% sales increase to approximately $1.02 billion in revenue. Adjusted operating profit in the U.S. coffee business rose 11.4% to $353 million, although $99 million in tariff refunds supported that growth. CEO Tim Cofer said consumers in lower- and middle-income households became more price-sensitive and moved toward ground coffee or instant coffee. Cofer also said private label penetration increased in both the total coffee category and the single-serve segment. KDP prepares to separate its coffee and soft drink businesses in early 2027 to form Global Coffee Co. This new company will combine the Keurig brewing platform and brands like Green Mountain Coffee Roasters with the JDE Peet’s portfolio, which includes Peet’s Coffee, Stumptown Coffee Roasters, Intelligentsia Coffee, L’OR, and numerous international brands.
Luckin expansion remains aggressive
Luckin Coffee’s expansion remains aggressive. The company reported third-quarter revenue of approximately $2.67 billion, up 17% from last year, and net income rose 45.4% to approximately $277 million. Luckin added 2,599 stores this quarter, bringing its worldwide total to 38,909 locations compared to 29,214 a year earlier. Most of these new stores opened in China, though the company added 40 locations in Malaysia, 14 in Singapore, and two in the United States. I view the store growth as the most successful part of the report, yet sales at established company-operated stores fell 11.1% compared to the same quarter last year. This decline marks the third consecutive quarter of negative same-store sales growth, following declines of 0.1% and 5.3% in the first two quarters of 2026. Luckin attributed the latest decline primarily to unusually high sales during the prior-year period. I find the scale of the massive store network impressive, but the third straight quarter of negative same-store sales is a significant problem for the coffee retailer.
