Consumers in the U.S. are increasingly opting for weight loss medications and non-alcoholic beverages, which is leading to a slowdown in soda sales. Despite this trend, Coca-Cola reported strong earnings for the second quarter, thanks to high global demand for its products. This success has led the company to raise its full-year expectations.
Coca-Cola CEO James Quincey expressed satisfaction with the company’s performance, noting growth in both revenue and operating income amidst a shifting market environment. However, the company did see a 1% decline in volume sales in North America, attributed to decreased sales in away-from-home categories, including water, sports drinks, coffee, tea, and sodas.
To mitigate the sales decline, Coca-Cola’s offerings such as Fairlife milk and its flagship soda, Coke, performed well, ranking first and second in retail growth during the quarter. Quincey mentioned that the company is collaborating with food chains, like McDonald’s, to integrate their beverages into meal deals, which is expected to bolster sales.
In financial terms, Coca-Cola exceeded analysts’ forecasts with reported revenue of $12.4 billion for the second quarter, translating to earnings of approximately $0.84 per share. Analysts had anticipated around $11.76 billion in revenue and earnings of roughly $0.81 per share.
Looking ahead, Coca-Cola raised its forecast for organic revenue growth from a previous estimate of 8%-9% to a new range of 9%-10%.
Pepsi, like Coca-Cola, has faced challenges in attracting U.S. consumers who are shifting towards healthier options. The company cited a series of product recalls as a factor in its weaker performance in the second quarter.