Dr Pepper Snapple Group is in line for a Q3 Snapple boost, say analysts

Dr Pepper Snapple Group is in line for a Q3 Snapple boost, say analysts

Dr Pepper Snapple Group's Q2 sales volumes dipped under expectations, but analysts are remaining optimistic about full-year results.

The Texas-based soft drinks maker posted a 2.1% drop in H1 net profit, with net sales climbing 2.4% yesterday (26 July). But although Q2 bottler case sales fell by 1%, analysts Stifel Nicolaus said the company will soon bounce back helped by Snapple sales and easier comparables.

“Noncarbonated volume is likely to return to positive in 3Q (third quarter) after declining mid single-digits for the last year,” the anlysts said in a note. “Snapple's laps ease considerably in Q3, and the company laps double-digit percentage price increases in juices in Q3.”

Meanwhile, analysts Bernstein Research praised DPSG's expense control, as operating margins came in higher than expected, despite low gross margins and increased marketing costs.

DPSG CEO Larry Young said yesterday the company will increase marketing by US$15m this year compared to last year, and add a further US$15m next year.

Young also told investors he is “cautiously optimistic” on future growth.