In the U.S., consumers are increasingly reluctant to purchase sodas due to the popularity of weight loss drugs and non-alcoholic alternatives. Despite this trend, Coca-Cola reported strong second-quarter earnings, attributing its success to robust global demand for its beverage offerings. This prompted the company to raise its full-year guidance.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, noting solid growth in both revenue and operating income amidst a changing market landscape. However, the company did face a 1% decline in volume sales in North America during the quarter. Quincey explained that this drop in the U.S. was mainly due to weaker sales in away-from-home channels, which encompass its water, sports drinks, coffee, tea, and soda products.
To mitigate the decline, Coca-Cola’s Fairlife milk and its flagship soda, Coke, helped offset losses, achieving significant retail sales growth. Quincey mentioned that the company is collaborating with food chains, such as McDonald’s, to incorporate its soda into combo meal offerings, which aims to drive sales.
Overall, Coca-Cola exceeded Wall Street expectations, reporting $12.4 billion in revenue for the second quarter, translating to earnings of approximately $0.84 per share, surpassing analyst forecasts of $11.76 billion and $0.81 per share.
In light of these results, Coca-Cola has revised its organic revenue growth expectations to between 9% and 10%, up from the previous forecast of 8% to 9%. Meanwhile, Pepsi continues to face challenges in attracting U.S. consumers who are favoring products geared towards weight loss and healthier lifestyles. The company recently reported subdued second-quarter earnings partly due to a series of recalls.