Consumers in the U.S. have been hesitant to purchase sodas, influenced by the growing popularity of weight loss drugs and non-alcoholic alternatives.
Despite this trend, Coca-Cola announced strong second-quarter earnings on Tuesday, buoyed by robust global demand for its beverages. The company has raised its full-year guidance as a result.
Coca-Cola CEO James Quincey expressed optimism about the second-quarter results, noting solid growth in both revenue and operating income amidst a changing market environment.
However, volume sales in North America dropped by 1% during this period. Quincey attributed the decline in the U.S. market to reduced sales in away-from-home channels, which encompass water, sports beverages, coffee, tea, and soda products.
The decline was partially mitigated by the success of its Fairlife milk brand and the company’s flagship product, Coca-Cola, which ranked first and second in retail sales growth for the quarter.
To counter this decline, Quincey mentioned ongoing collaborations with fast-food chains to integrate their sodas into combo meals. Notably, Coca-Cola is reportedly assisting McDonald’s in enhancing its $5 meal deal that includes a soft drink.
Overall, Coca-Cola exceeded Wall Street expectations by generating $12.4 billion in revenue for the quarter, translating to approximately $0.84 per share. Analysts had anticipated revenues of $11.76 billion and earnings of around $0.81 per share.
The company has now revised its forecast for organic revenue growth to between 9% and 10%, an increase from its earlier estimate of 8% to 9%.
Pepsi, like Coca-Cola, is facing challenges in appealing to U.S. consumers. As more individuals focus on weight loss and healthier lifestyles, Pepsi attributed its disappointing second-quarter performance to a series of product recalls.