Coca-Cola has reported strong earnings for the second quarter, buoyed by robust global demand for its products, even as weight loss drugs and non-alcoholic options have made U.S. consumers more cautious about purchasing sodas. The beverage giant raised its full-year guidance following the results.
James Quincey, CEO of Coca-Cola, expressed optimism about the company’s performance, stating they achieved solid revenue and operating income growth despite challenging market conditions. However, in North America, the company experienced a 1% decline in volume sales, attributed to weaker performance in away-from-home channels, which encompass water, sports drinks, coffee, tea, and soda products.
The decline was somewhat mitigated by the success of Fairlife milk and Coca-Cola itself, which ranked first and second in retail sales growth for the quarter. To counteract the decreasing sales, Coca-Cola is collaborating with restaurant chains like McDonald’s to incorporate its soft drinks into combo meals, including a $5 meal deal.
Coca-Cola surpassed Wall Street expectations, reporting revenue of $12.4 billion, or about $0.84 per share, compared to the anticipated $11.76 billion, roughly $0.81 per share, as per FactSet. The company has adjusted its organic revenue growth forecast to between 9% and 10%, an increase from the previous estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers who are shifting towards options that emphasize weight loss and healthier choices. Pepsi recently cited a series of product recalls as factors contributing to its lackluster performance in the second quarter.