Consumers in the U.S. are increasingly opting for weight loss drugs and non-alcoholic beverages, impacting soda sales. Despite these challenges, Coca-Cola reported impressive earnings for the second quarter, fueled by strong global demand for its products. This prompted the company to raise its revenue forecast for the year.
Coca-Cola CEO James Quincey expressed optimism regarding their performance, highlighting robust growth in revenue and operating income amid a shifting market. However, the company’s North American sales volume fell by 1% during the quarter. Quincey attributed the decline to reduced sales in “away-from-home channels,” which encompass water, sports drinks, coffee, tea, and soda.
To counter the downturn, Coca-Cola noted that its Fairlife milk and Coke soda offerings, which ranked high in retail sales growth, helped mitigate the declines. Quincey mentioned ongoing collaborations with food chains, particularly McDonald’s, to integrate its sodas into value meal offerings.
Coca-Cola surpassed analysts’ expectations, generating $12.4 billion in revenue for the quarter, translating to approximately $0.84 per share. Wall Street had anticipated revenue of $11.76 billion, or about $0.81 per share.
The company now expects organic revenue growth between 9% and 10%, an increase from its earlier forecast of 8% to 9%. Meanwhile, Pepsi has faced similar challenges in attracting U.S. consumers, particularly as they shift towards healthier options and prioritize weight loss, which the company cited as a factor for its underwhelming second-quarter results attributed to a series of recalls.