Consumers in the U.S. are delaying soda purchases due to the rise of weight loss drugs and non-alcoholic beverage options. Despite this trend, Coca-Cola reported strong earnings for the second quarter, fueled by a healthy global demand for its beverages. As a result, the company has raised its full-year guidance.
Coca-Cola CEO James Quincey expressed optimism regarding the quarter’s performance, highlighting healthy topline and operating income growth despite changing market conditions. However, the company experienced a 1% decline in volume sales in North America, primarily due to reduced demand in away-from-home channels, which encompasses water, sports drinks, coffee, tea, and sodas.
To mitigate this decrease, Coca-Cola noted growth from its Fairlife milk products and a strong performance from its flagship soda, Coke, which ranked first and second in retail sales growth, respectively, during the quarter. Quincey announced that Coca-Cola is collaborating with food chains, including McDonald’s, to incorporate its sodas into combo meals, enhancing the appeal of their offerings.
Coca-Cola’s financial results surpassed Wall Street projections, as the company reported revenues of $12.4 billion, equating to approximately $0.84 per share. Analysts had anticipated revenues of around $11.76 billion, or $0.81 per share. The company now expects organic revenue growth between 9% and 10%, raising its previous guidance from 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers who are increasingly leaning towards healthier options and weight loss products. Additionally, earlier in July, Pepsi attributed its lackluster second quarter performance to a number of product recalls.