In the United States, consumers are increasingly turning to weight loss medications and non-alcoholic beverages, leading to a dip in soda purchases. Despite this trend, Coca-Cola announced strong second-quarter earnings, with robust global demand for its beverages prompting the company to increase its full-year guidance.
Coca-Cola CEO James Quincey expressed optimism about the company’s performance, stating that the second-quarter results showcased solid growth in both revenue and operating income amid a fluctuating market. However, in North America, volume sales fell by 1% during the quarter, attributed to weaker performance in channels outside of home consumption, affecting their water, sports drinks, coffee, tea, and soda products.
This decline was somewhat mitigated by the success of Coca-Cola’s Fairlife milk line and its flagship soda, which ranked first and second in retail sales growth for the quarter. To counter the volume decrease, Quincey mentioned that Coca-Cola is collaborating with fast-food chains, including McDonald’s, to integrate its sodas into combo meals, such as the popular $5 meal deal.
Coca-Cola’s revenue for the second quarter reached $12.4 billion, exceeding Wall Street expectations of $11.76 billion. The company reported earnings of approximately $0.84 per share, surpassing the anticipated $0.81. As a result, Coca-Cola has raised its forecast for organic revenue growth to a range between 9% and 10%, a revision from the previous estimate of 8% to 9%.
Pepsi is facing similar challenges in the market, as consumer trends shift towards healthier options and weight management products. The company has also struggled with sales in the U.S., and recently cited supply chain issues and product recalls for its lackluster performance in the second quarter.