Coca-Cola has reported strong second-quarter earnings, reflecting robust global demand for its beverages, which has led the company to raise its full-year outlook. CEO James Quincey expressed optimism about the results, noting solid growth in both revenue and operating income despite a challenging market environment.
Nonetheless, the company faced a 1% decline in volume sales in North America during the quarter. Quincey attributed this drop to weakened performance in “away-from-home channels,” which encompass various categories, including water, sports drinks, tea, and soda. However, the decline was mitigated by the success of its Fairlife milk line and the popular Coke brand, which ranked among the top two in retail sales growth.
To counteract the decline in soda consumption, Coca-Cola is collaborating with fast-food chains to integrate its soft drinks into combo meal offerings, specifically working with McDonald’s to enhance its $5 meal deal that includes a beverage.
Overall, Coca-Cola exceeded Wall Street forecasts, reporting $12.4 billion in revenue for the second quarter, equating to approximately $0.84 per share. Analysts had predicted revenues of $11.76 billion, or about $0.81 per share.
The company has revised its forecast for organic revenue growth to between 9% and 10%, an increase from the previous estimate of 8% to 9%.
Similarly, PepsiCo is facing challenges in the U.S. market as consumers shift their focus towards healthier options and weight loss products. A Gallup poll has indicated that young adults in the U.S. are consuming significantly less alcohol than before. In early July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.