Dr Pepper Snapple Group encouraged by 2013 opportunities

PLANO, Texas — Unseasonably cold and wet weather and cautious consumer spending negatively impacted business at Dr Pepper Snapple Group, which reported second quarter 2013 net sales of $1.61 billion, a 1% decrease from $1.62 for the same period last year. 

Reported income from operations for the quarter was $285 million, including $7 million of unrealized commodity mark-to-market losses. Reported income from operations was $300 million in the prior year period, including $6 million of unrealized commodity mark-to-market losses.

Year-to-date, reported net sales were flat and reported income from operations was $482 million, including $14 million of unrealized commodity mark-to-market losses. Reported income from operations was $492 million in the prior year period.

“I am pleased with the perseverance of our people as they continued to execute our strategy amid a very challenging environment. During the quarter, our business was negatively impacted by unseasonably cold and wet weather, a cautious consumer and continued CSD [carbonated soft drinks] category headwinds,” said DPS president and CEO Larry Young. “Against this backdrop, we continued to gain both volume and dollar share in the carbonate soft drink category and our Ten platform is performing in line with our expectations. Changing consumer behavior takes time, and we remain committed to giving consumers a reason to come back to the CSD category. With strong innovation and execution plans in place, I am encouraged about our opportunities for the remainder of 2013.”

For the quarter, bottler case sales volume declined 3% with carbonated soft drinks declining 3% and non-carbonated beverages declining 2%.

In CSDs, Dr Pepper volume decreased 4%, as the CSD category continued to face significant headwinds. The company’s Core 4 brands declined 1% driven primarily by a high-single digit decrease in Sunkist soda and a mid-single digit decrease in 7Up, partially offset by a mid-single digit increase in Canada Dry. Crush and Sun Drop both experienced double-digit declines, and Squirt declined by a mid-single digit. These declines were partially offset by a mid-single digit increase in Peñafiel. Fountain foodservice volume declined 2%, cycling 3% volume growth in the prior year period.

In NCBs, Hawaiian Punch volume declined 7%. This decline was partially offset by a 4% increase in Snapple and a 2% increase in Mott’s.

By geography, U.S. and Canada volume declined 4%, and Mexico and the Caribbean volume increased 2%.

For the quarter, sales volume decreased 4%. Year-to-date, sales volumes decreased 3%.

In addition to Dr Pepper Snapple Group’s flagship Dr Pepper and Snapple brands, its portfolio includes