Consumers in the U.S. are increasingly hesitant to purchase sodas, influenced by the rise of weight loss medications and non-alcoholic alternatives. Despite this trend, Coca-Cola demonstrated strong performance in its second-quarter earnings, benefiting from robust global demand for its beverages. The company has subsequently raised its full-year guidance.
Coca-Cola’s CEO, James Quincey, expressed optimism about the results, highlighting solid growth in both revenue and operating income amid a changing market landscape. However, in North America, the company experienced a 1% decline in volume sales. Quincey attributed this decrease to “softness in away-from-home channels,” which encompasses its water, sports drinks, coffee and tea, and soda products.
The sales decline was somewhat mitigated by contributions from Fairlife milk and Coca-Cola, which ranked first and second in retail sales growth for the quarter. To combat the volume drop, Quincey mentioned initiatives to partner with food chains, including collaboration with McDonald’s to enhance its meal combinations that feature soft drinks.
Coca-Cola exceeded Wall Street expectations, reporting $12.4 billion in revenue, which translates to approximately $0.84 per share, surpassing forecasts of $11.76 billion or about $0.81 per share. The company has revised its organic revenue growth forecast to between 9% and 10%, an increase from its earlier estimate of 8% to 9%.
Pepsi, on the other hand, has faced challenges in attracting U.S. consumers who are increasingly interested in health-conscious choices. In July, the company attributed its lackluster second-quarter performance to a series of product recalls, further impacting its appeal in a market leaning toward healthier options.