Keurig Dr Pepper Inks Long-term Deal With Nestle USA For Starbucks K-Cup Pods

(RTTNews) - While reporting its fourth-quarter financial results on Thursday, Keurig Dr Pepper Inc. (KDP) it has entered into a long-term, strategic agreement with Nestlé USA to manufacture and distribute Starbucks branded packaged coffee in K-Cup pods in the U.S. and Canada. Financial terms of the deal between KDP and Nestlé were not disclosed.

The new agreement with Nestle (NSRGY.PK, NSTR.L) will replace the existing K-Cup pod agreement between KDP and Starbucks Corp. (SBUX) following a transition period. Nestle acquired the rights in August 2018 to market and distribute Starbucks CPG and Foodservice products globally, outside of Starbucks coffee shops.

For fiscal 2020, Keurig Dr Pepper forecast adjusted earnings per share in a range of 13 percent to 15 percent, or $1.38 to $1.40 per share, and net sales growth to accelerate to 3.0 percent to 4.0 percent versus the company's merger target of 2.0 percent to 3.0 percent.

On average, analysts polled by Thomson Reuters expect the company to report earnings of $1.40 per share for the year on 3 percent revenue growth to $11.48 billion. Analysts' estimates typically exclude special items.

Over the three-year period ending 2021, the company continues to expect to deliver adjusted earnings per share growth in the range of 15 percent to 17 percent, in line with its merger target.