Weight loss medications and non-alcoholic alternatives are leading consumers in the U.S. to reduce soda purchases, but Coca-Cola still reported strong second-quarter earnings, supported by global demand for its beverages. The company raised its full-year guidance following the results.
Coca-Cola’s CEO, James Quincey, expressed optimism about the performance, noting solid growth in revenue and operating income despite a shifting market landscape. However, in North America, beverage volume sales dipped by 1% in the quarter. Quincey attributed the decline to reduced sales in “away-from-home channels,” which encompass products such as water, sports drinks, tea, and soda.
The decrease in volume was somewhat balanced by sales of Fairlife milk and Coca-Cola’s flagship soda, which ranked first and second in retail sales growth during the quarter. To boost sales, Quincey mentioned collaborations with food chains to include Coca-Cola in combo meal offerings, specifically with McDonald’s to enhance its $5 meal deal that features a soft drink.
Despite the challenges in the market, Coca-Cola exceeded Wall Street expectations with second-quarter revenue of $12.4 billion, translating to approximately $0.84 per share. Analysts had anticipated revenue around $11.76 billion, or about $0.81 per share.
The company now projects organic revenue growth to be between 9% and 10%, an increase from the prior estimate of 8% to 9%.
Similarly, Pepsi faces challenges as U.S. consumers shift towards weight loss products and healthier lifestyle choices. A recent Gallup poll noted that young adults are consuming significantly less alcohol than before. Pepsi attributed its lackluster second-quarter performance to several product recalls.