Dr Pepper Snapple Group Inc DPS
Q1 2013 Earnings Call Transcript

Transcript Call Date 04/24/2013

Operator: Good morning and welcome to Dr Pepper Snapple Group's First Quarter 2013 Earnings Conference Call. Your lines have been placed on listen-only until the question-and-answer session. Today's call is being recorded and includes a slide presentation which can be accessed at The call and slides will also be available for replay and download after the call has ended.

It is now my pleasure to introduce Carolyn Ross, Vice President, Investor Relations. Carolyn, you may begin.

Carolyn Ross - VP, IR: Thank you, Jackie, and good morning, everyone. Before we begin, I would like to direct your attention to the Safe Harbor statement and remind you that this conference call contains forward-looking statements, including statements concerning our future financial and operational performance. These forward-looking statements should also be considered in connection with cautionary statements and disclaimers contained in the Safe Harbor statements, in this morning's earnings press release and our SEC filings. Our actual performance could differ materially from these statements, and we undertake no duty to update these forward-looking statements.

During this call, we may reference certain non-GAAP financial measures that reflect the way we evaluate the business and which we believe provide useful information for investors. Reconciliations of those non-GAAP measures to GAAP can be found in our earnings press release and on the Investor Relations page at

This morning's prepared remarks will be made by Larry Young, Dr Pepper Snapple Group's President and CEO; and Marty Ellen, our CFO. Following our prepared remarks, we will open the call for your questions.

With that, let me turn the call over to Larry.

Larry D. Young - President and CEO: Thanks, Carolyn, and good morning, everyone. We're pleased with our performance in the quarter. As our teams remained focused in executing our strategy, despite macroeconomic challenges and seasonably cold weather across the country and continued criticism of sugar sweetened beverages.

For the quarter, bottler case sales declined 2% on 3 percentage points of price and mix. Dr Pepper declined 3% with declines across the base business and Dr Pepper TEN, as we continue to cycle inventory bills from the national launch. It should come as no surprise that our Dr Pepper performance was negatively impacted by calendar shifts from our larger bottling partners and while we continue to gain new availabilities in fountain, softening trends in the restaurant industry more than offset those gains.

Our Core 4 brands were flat for the quarter from the launch of our TEN products and I'll speak more about TEN in a moment. Hawaiian Punch decreased 14%, primarily due to its performance at one national retailer and Mott's posted strong growth of 11%, as we continue to gain distribution across key packages in both the juice and sauce categories.

Snapple declined 2%, cycling 5% growth from a year ago, on price increases and lower promotional activity associated with the national launch of Diet Half 'n Half last year. While I don't like talking about the weather, the severe cold this winter in the Northeast; Snapple's heartland, definitely had an impact on this brand.

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