Weight loss medications and non-alcoholic alternatives are causing consumers in the U.S. to hold back on purchasing sodas. Despite this trend, Coca-Cola reported strong earnings for the second quarter on Tuesday, fueled by robust global demand for its beverages, prompting the company to increase its forecast for the year.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, stating, “We are encouraged with our second-quarter results, which delivered solid topline and operating income growth in an ever-changing landscape.”
However, the company saw a 1% decline in volume sales in North America during the quarter. Quincey attributed this drop to decreased sales in away-from-home channels, which include products like water, sports drinks, coffee, tea, and sodas.
The decline was somewhat offset by strong performances from Fairlife milk and Coca-Cola’s namesake soda, which ranked first and second in retail sales growth. To counteract the decline, Coca-Cola is collaborating with food chains to include its sodas in combo meals. Reports indicate the company is working with McDonald’s to enhance its $5 meal deal that includes a soft drink.
Overall, Coca-Cola surpassed Wall Street’s expectations, reporting $12.4 billion in revenue during the second quarter, with earnings of about $0.84 per share. Analysts had anticipated revenue of $11.76 billion and earnings of approximately $0.81 per share.
The company also increased its forecast for organic revenue growth to between 9% and 10%, up from the previous estimate of 8% to 9%.
Like Coca-Cola, Pepsi has been facing challenges in attracting U.S. consumers who are shifting towards healthier products and focusing on weight loss. Pepsi attributed its weak performance in the second quarter, in part, to a series of product recalls.