Consumers in the U.S. are increasingly hesitant to purchase sodas, influenced by the popularity of weight loss medications and non-alcoholic alternatives. Despite this trend, Coca-Cola reported strong earnings for the second quarter, benefiting from high global demand for its beverages, which led the company to raise its full-year revenue forecast.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s second-quarter performance, highlighting growth in revenue and operating income amid a shifting market. However, the company experienced a 1% decline in volume sales in North America, attributed to weaker performance in channels outside of home, such as water, sports drinks, coffee, tea, and soda.
This volume drop was partially countered by growth in Fairlife milk and robust sales of Coke, which ranked among the top in retail sales growth. To address the decline, Coca-Cola is collaborating with food chains to incorporate its beverages into combo meals, including efforts with McDonald’s to enhance the fast-food chain’s $5 meal deal.
Coca-Cola surpassed Wall Street expectations, reporting $12.4 billion in revenue for the second quarter, amounting to approximately $0.84 per share. Analysts had predicted revenues of around $11.76 billion, or about $0.81 per share, according to FactSet. The company now anticipates organic revenue growth of 9% to 10%, an increase from its previous forecast of 8% to 9%.
Pepsi, like Coca-Cola, is facing challenges in attracting U.S. consumers who are leaning towards healthier lifestyle choices. The company cited a series of recalls as contributing factors to its subdued performance in the second quarter.