Consumers in the U.S. are increasingly delaying soda purchases due to the popularity of weight loss drugs and non-alcoholic alternatives. Despite this trend, Coca-Cola reported strong second-quarter earnings, fueled by global demand for its beverage products, leading the company to raise its full-year guidance.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, highlighting solid revenue and operating income growth amid a shifting market landscape. However, the company’s North American volume sales experienced a 1% decline during the quarter, attributed to decreased performance in “away-from-home channels,” which encompass water, sports drinks, coffee, tea, and soda products.
Coca-Cola noted that this decline was somewhat mitigated by the success of its Fairlife milk and Coke, which were top performers in retail sales growth. To enhance sales, Quincey mentioned collaboration with food chains to integrate its soda into combo meals, particularly initiatives with McDonald’s to elevate its $5 meal deal.
Ultimately, Coca-Cola surpassed Wall Street expectations by reporting revenues of $12.4 billion, equating to approximately $0.84 per share, exceeding forecasts of $11.76 billion and $0.81 per share. The company has adjusted its forecast for organic revenue growth to between 9% and 10%, up from the earlier estimate of 8% to 9%.
Similarly, PepsiCo is facing challenges in attracting U.S. consumers who are gravitating towards healthier options and weight loss-oriented products. The company noted earlier in July that a series of recalls had impacted its performance in the second quarter.