Weight loss medications and non-alcoholic alternatives are leading consumers in the U.S. to reduce their soda purchases. Despite this trend, Coca-Cola reported strong earnings for the second quarter, driven by solid global demand for its beverages, prompting the company to raise its full-year forecast.
Coca-Cola’s CEO, James Quincey, expressed optimism about the second quarter’s performance, noting significant revenue and operating income growth amid a changing market landscape. However, in North America, volume sales dipped by 1% during the quarter. Quincey attributed this decline to reduced sales in “away-from-home channels,” which include water, sports drinks, coffee, tea, and soda.
To mitigate the decline, the company’s Fairlife milk line and the flagship soda, Coke, showed strong retail sales growth, ranking first and second in performance during the quarter. Quincey mentioned that Coca-Cola is collaborating with food chains to integrate its beverages into combo meals, particularly working with McDonald’s to enhance its $5 meal deal that includes a soft drink.
Overall, Coca-Cola exceeded Wall Street’s expectations, reporting $12.4 billion in revenue for the second quarter, translating to approximately $0.84 per share. Analysts had predicted revenues of $11.76 billion, or roughly $0.81 per share.
Coca-Cola has revised its forecast for organic revenue growth to between 9% and 10%, an upgrade from its earlier estimate of 8% to 9%. Meanwhile, Pepsi is also facing challenges in the U.S. market, as consumers increasingly favor products that align with weight loss and healthier lifestyles. The company attributed its lackluster second quarter performance to a series of product recalls.