Coca-Cola is experiencing robust sales despite shifts in consumer behavior towards weight loss drugs and non-alcoholic beverages, leading many U.S. consumers to reduce their soda purchases. The beverage company announced strong second-quarter earnings, which prompted it to raise its full-year guidance.
Coca-Cola’s CEO, James Quincey, expressed optimism during a statement, highlighting solid topline and operating income growth amid the changing market. However, the company did note a 1% decline in volume sales in North America for the quarter, largely attributed to reduced purchases in away-from-home channels, such as water, sports drinks, coffee, tea, and soda.
The decline in soda sales was somewhat mitigated by the performance of Fairlife milk and strong retail sales growth for Coke, ranking first and second in retail during the quarter. To counteract the dip in sales, Coca-Cola is collaborating with food chains, including McDonald’s, to incorporate its soda into combo meal offerings.
Financially, Coca-Cola exceeded Wall Street predictions, reporting $12.4 billion in revenue for the second quarter, which translates to approximately $0.84 per share. Analysts had anticipated revenues around $11.76 billion, or about $0.81 per share. The company also updated its forecast for organic revenue growth to between 9% and 10%, an increase from its earlier expectations of 8% to 9%.
Meanwhile, Pepsi is grappling with similar challenges, struggling to engage U.S. consumers who are increasingly opting for healthier options. The company attributed its modest second-quarter performance to a series of product recalls.