Weight loss medications and the rise of non-alcoholic beverages have led U.S. consumers to reduce their soda consumption. Despite this trend, Coca-Cola announced impressive earnings for the second quarter, largely due to strong global demand for its products, prompting the company to increase its full-year forecast.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s results, noting solid revenue and operating income growth amidst a changing market landscape. However, the North American segment saw a 1% decline in volume sales during the quarter, which Quincey attributed to weaker performance in away-from-home channels, affecting various offerings including water, sports drinks, coffee, tea, and sodas.
The decline was mitigated by strong performance in Fairlife milk and Coca-Cola’s flagship soda, which ranked among the top in retail sales growth during the quarter. To counteract the drop in volume, Coca-Cola is collaborating with fast food chains to incorporate its products into combo meals, including partnerships with McDonald’s to enhance their $5 meal deal.
Coca-Cola exceeded Wall Street’s projections, reporting $12.4 billion in revenue for the second quarter, equating to about $0.84 per share, surpassing the anticipated $11.76 billion and $0.81 per share. The company has adjusted its forecast for organic revenue growth to between 9% and 10%, an increase from its previous estimate of 8% to 9%.
Pepsi, like Coca-Cola, is facing challenges in attracting U.S. consumers who are leaning towards healthier choices. The company experienced a muted second quarter, partly due to a series of product recalls.