Coca-Cola has reported strong second-quarter earnings, buoyed by robust global demand for its beverage offerings, even as consumer trends in the U.S. shift toward weight loss drugs and non-alcoholic options, leading to a slowdown in soda purchases. The results encourage the beverage giant to enhance its full-year guidance.
Coca-Cola’s CEO, James Quincey, expressed satisfaction with the company’s performance, highlighting solid growth in revenue and operating income despite a changing market landscape. Yet, in North America, the company experienced a 1% decline in volume sales for the quarter, attributing this downturn primarily to a decrease in sales through “away-from-home channels,” which includes products like water, sports drinks, coffee, tea, and soda.
The decline in volume was mitigated somewhat by the success of Fairlife milk and Coca-Cola itself, which ranked first and second in retail sales growth during the quarter. To combat declining sales, Coca-Cola is partnering with food chains to incorporate its sodas into combo meals. Reports indicate the company is collaborating with McDonald’s to enhance the visibility of its $5 meal deal, which includes a soft drink.
Despite these challenges, Coca-Cola exceeded Wall Street’s expectations, reporting $12.4 billion in revenue, translating to approximately $0.84 per share. Analysts had projected revenue of $11.76 billion, roughly $0.81 per share. Additionally, the company has upgraded its forecast for organic revenue growth, now expecting between 9% and 10%, an increase from its earlier estimate of 8% to 9%.
Meanwhile, Pepsi is facing similar challenges in the U.S. market, as consumer preferences shift toward healthier and weight-loss-focused products. In early July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls, reflecting ongoing struggles to engage American consumers.