Consumers in the U.S. are holding back on soda purchases, influenced by weight loss medications and a rise in non-alcoholic beverage options. Despite this trend, Coca-Cola reported strong earnings for the second quarter, driven by global demand for its products, leading the company to increase its full-year outlook.
Coca-Cola’s CEO James Quincey expressed his optimism about the company’s second-quarter performance, highlighting solid revenue and operating income growth. However, the company saw a 1% decline in volume sales in North America, attributed to reduced activity in various away-from-home channels, which encompass water, sports drinks, coffee, tea, and sodas.
The company noted that this decline was somewhat mitigated by growth in its Fairlife milk line and strong sales of its signature Coke brand, which ranked first and second in retail sales growth for the quarter. To counteract the sales dip, Coca-Cola is collaborating with food chains to include its drinks in combo meals, particularly with McDonald’s to enhance its $5 meal deal that comes with a soft drink.
Overall, Coca-Cola exceeded Wall Street expectations, reporting $12.4 billion in revenue for the second quarter, equivalent to approximately $0.84 per share, surpassing the anticipated $11.76 billion and $0.81 per share. The company revised its forecast for organic revenue growth, now projecting an increase of 9% to 10%, up from the earlier range of 8% to 9%.
Pepsi is also facing challenges in attracting U.S. consumers, as more people gravitate towards products that support weight loss and healthier lifestyles. The company noted that a series of recalls contributed to its lackluster second quarter performance.