Net sales in the fourth quarter of 2019 increased 4.3% to $2.93 billion, compared to $2.81 billion in the year ago period, reflecting higher volume/mix of 5.3% and favorable foreign currency translation of 0.1%, partially offset by unfavorable net price realization of 0.7%.
Excluding the one month of residual sales from BodyArmor prior to its exit in the fourth quarter of 2018 and the impact of foreign currency translation, net sales grew 4.6%.
KDP in market performance continued to be solid in the fourth quarter of 2019, with dollar consumption and market share advancing in several key categories including CSDs, shelf stable fruit drinks and shelf stable apple sauce.
This performance reflected the strength of Dr Pepper and Canada Dry CSDs, Snapple juice drinks and Motts apple sauce.
In coffee, retail consumption of single serve pods manufactured by KDP grew nearly 4% in IRi tracked channels, with accelerated growth in untracked channels.
This performance of tracked and untracked channels is consistent with the Company's pod shipment volume growth of 10%.
In U.S. tracked channels, dollar market share of KDP manufactured pods of 82.0% in the fourth quarter was even with year ago.
Operating income increased 30% to $713 million in the fourth quarter of 2019, compared to $547 million in the year ago period.
Adjusted operating income in the quarter advanced 13% to $813 million, compared to Adjusted pro forma operating income of $720 million in the year ago period.
This performance reflected strong productivity and synergies, the strong growth in net sales and a network optimization program gain of $30 million on the asset sale leaseback of three manufacturing facilities in the Packaged Beverages segment.
Partially offsetting these drivers was inflation, primarily in input costs and logistics, and higher marketing.
Adjusted operating margin grew 210 basis points versus year ago to 27.7%.
Net income increased 53% to $406 million in the fourth quarter of 2019, compared to $266 million in the year ago period.
Diluted EPS grew 53% to $0.29 in the quarter, compared to diluted EPS of $0.19 in the year ago period.
Adjusted net income advanced 15% to $491 million in the fourth quarter of 2019, compared to $427 million in the year ago period.
This performance primarily reflected the strong growth in Adjusted operating income, partially offset by the unfavorable comparison in the year ago period of a $21 million pre tax benefit from the unwinding of several interest rate swap contracts and a $12 million pre tax gain related to the Core acquisition.
Adjusted diluted EPS increased 17% to $0.35, compared to Adjusted pro forma diluted EPS of $0.30 in the year ago period. ■