Consumers in the U.S. are increasingly opting for weight loss medications and non-alcoholic beverages, leading to a slowdown in soda sales. Despite this trend, Coca-Cola reported strong earnings for the second quarter, citing robust global demand for its products. This performance has prompted the company to raise its full-year projections.
Coca-Cola CEO James Quincey expressed optimism about their second-quarter results, noting solid growth in both revenue and operating income amidst a fluctuating market. However, the company’s volume sales in North America experienced a 1% decline, attributed primarily to weaker performance in away-from-home channels, which encompass water, sports drinks, coffee, tea, and sodas.
Despite the decline in volume sales, Coca-Cola’s products, particularly Fairlife milk and its signature Coke, performed well, ranking first and second in retail sales growth during the quarter. To combat the sales slump, the company is collaborating with restaurant chains to integrate its sodas into combo meals, including efforts with McDonald’s to enhance its $5 meal deal that includes a soft drink.
For the second quarter, Coca-Cola’s revenue reached $12.4 billion, translating to approximately $0.84 per share, surpassing Wall Street expectations of $11.76 billion and roughly $0.81 per share according to FactSet. The company has adjusted its forecast for organic revenue growth to between 9% and 10%, an increase from the earlier range of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers who are shifting towards healthier choices. The company cited several product recalls for its lackluster performance in the second quarter.