In the United States, the popularity of weight loss medications and non-alcoholic beverages is impacting soda sales, leading to a slowdown in purchases. Despite this trend, Coca-Cola announced strong earnings for the second quarter, driven by robust global demand for its beverage lineup, prompting the company to raise its full-year projections.
Coca-Cola CEO James Quincey expressed optimism about the company’s second-quarter performance, highlighting significant growth in revenue and operating income despite a challenging market environment. However, the company reported a 1% decline in volume sales in North America, attributing this drop to reduced activity in out-of-home settings, which encompass water, sports drinks, coffee, tea, and soda.
To counteract the sales decline, Coca-Cola’s offerings such as Fairlife milk and its flagship soda, Coke, performed well, ranking first and second in retail sales growth during the quarter. Additionally, Quincey indicated that Coca-Cola is collaborating with fast food restaurants like McDonald’s to integrate its sodas into meal deals to drive sales.
Overall, Coca-Cola exceeded Wall Street expectations, reporting $12.4 billion in revenue, translating to approximately $0.84 per share. Analysts had anticipated revenues of $11.76 billion, or about $0.81 per share. The company now forecasts organic revenue growth between 9% and 10%, revising its earlier estimate of 8% to 9%.
In contrast, Pepsi has faced challenges in attracting U.S. consumers, who are increasingly favoring health-oriented products amid a shift toward weight loss and healthier lifestyle choices. Pepsi attributed its lackluster second-quarter performance to a series of product recalls.