Consumers in the U.S. are increasingly opting for weight loss drugs and non-alcoholic beverages, leading to a slowdown in soda purchases. Despite this trend, Coca-Cola reported solid second-quarter earnings, fueled by strong global demand for its products. The company has raised its full-year outlook as a result.
Coca-Cola CEO James Quincey expressed optimism about their second-quarter performance, highlighting significant growth in revenue and operating income despite market changes. However, the company experienced a 1% decline in volume sales in North America, attributed to weakness in away-from-home channels, which encompass water, sports drinks, coffee, tea, and soda.
Quincey indicated that the decrease was somewhat balanced by the success of Fairlife milk and the Coca-Cola soda line, which ranked first and second in retail sales growth, respectively. To mitigate declining sales, Coca-Cola is collaborating with food chains to include its sodas in combo meals, specifically with McDonald’s on enhancing its $5 meal deal that features a soft drink.
Overall, Coca-Cola exceeded Wall Street expectations, reporting $12.4 billion in revenue for the quarter, translating to approximately $0.84 per share. Analysts had predicted revenue of $11.76 billion, or roughly $0.81 per share.
Additionally, Coca-Cola has updated its forecast for organic revenue growth, now estimating an increase of 9% to 10%, up from an earlier prediction of 8% to 9%.
Similarly, Pepsi is facing challenges in engaging U.S. consumers, who are gravitating towards healthier lifestyle choices. In July, Pepsi cited several product recalls as a factor in its underwhelming second-quarter results.