In the United States, the rise of weight loss medications and non-alcoholic beverages is leading consumers to be more cautious about purchasing soda. Despite this trend, Coca-Cola reported strong second-quarter earnings, bolstered by solid global demand for its products, prompting the company to increase its full-year guidance.
Coca-Cola CEO James Quincey expressed optimism about the company’s performance, highlighting “solid topline and operating income growth in an ever-changing landscape” during the second quarter.
However, the company experienced a 1% decline in volume sales in North America. Quincey attributed this decline to reduced activity in “away-from-home channels,” which encompass a range of products including soda, water, and coffee. The drop in volume was somewhat mitigated by the success of Fairlife milk and Coke, which ranked first and second in retail sales growth during the quarter.
To address the sales decline, Coca-Cola is collaborating with food chains to include its products in combo meal deals. Reports indicate that the company is partnering with McDonald’s to enhance the fast-food chain’s $5 meal deal, which features a soft drink.
Overall, Coca-Cola’s financial performance exceeded Wall Street expectations, with reported revenue of $12.4 billion for the second quarter, translating to approximately $0.84 per share. Analysts had anticipated revenue of $11.76 billion, or about $0.81 per share.
Coca-Cola has also adjusted its growth forecast for organic revenue, now predicting an increase of 9% to 10%, up from the previous estimate of 8% to 9%.
Pepsi, like Coca-Cola, faces challenges capturing the interest of U.S. consumers who are increasingly favoring healthier options. The company recently cited a series of product recalls as factors contributing to a lackluster second quarter.