Consumers in the U.S. are delaying soda purchases, influenced by the popularity of weight loss drugs and non-alcoholic alternatives. Despite this trend, Coca-Cola reported strong earnings for the second quarter, which were fueled by global demand for its products. The company raised its full-year revenue forecast following the positive results.
Coca-Cola CEO James Quincey expressed optimism about the earnings, highlighting the solid growth in revenue and operating income in a challenging market. However, the company did experience a 1% decline in volume sales in North America, particularly affected by weaker performance in away-from-home channels, which encompass its water, sports drinks, coffee, tea, and soda categories.
To mitigate these declines, Quincey noted that Coca-Cola is collaborating with food chains to include its sodas in combo meal offerings. The company is reportedly partnering with McDonald’s to enhance the value of its $5 meal deal that includes a soft drink.
Overall, Coca-Cola exceeded Wall Street’s expectations, reporting $12.4 billion in revenue for the second quarter, equating to approximately $0.84 per share. Analysts had anticipated revenue of around $11.76 billion, or about $0.81 per share.
Looking ahead, Coca-Cola has adjusted its forecast for organic revenue growth to between 9% and 10%, an increase from its earlier estimate of 8% to 9%.
Pepsi, on the other hand, faces challenges in attracting U.S. consumers who are focusing more on weight loss and healthier lifestyle choices. Recent reports indicate that younger adults in the U.S. are drinking less alcohol, according to a Gallup poll. Pepsi attributed its disappointing second-quarter results to various product recalls.