Weight loss medications and non-alcoholic alternatives are causing consumers in the U.S. to reconsider their soda purchases. Despite these trends, Coca-Cola reported strong earnings for the second quarter, buoyed by robust global demand for its beverages, prompting the company to raise its full-year forecasts.
Coca-Cola CEO James Quincey expressed optimism about the company’s financial performance, noting, “We are encouraged with our second-quarter results, which delivered solid topline and operating income growth in an ever-changing landscape.”
However, the company experienced a 1% decline in volume sales in North America during the same period. Quincey attributed this drop to “softness in away-from-home channels,” encompassing its water, sports drinks, coffee, tea, and soda products.
To mitigate the decline, Coca-Cola’s Fairlife milk offerings and its flagship soda, Coke, showed strong sales, ranking first and second in retail sales growth for the quarter. Quincey also mentioned that the company is partnering with food chains to include soda in combo meals, specifically working with McDonald’s to enhance its $5 meal deal with a soft drink.
Coca-Cola’s second-quarter revenue reached $12.4 billion, surpassing Wall Street’s expectations of approximately $11.76 billion. The earnings per share came in at around $0.84, compared to forecasts of $0.81. The company has now revised its organic revenue growth forecast to between 9% and 10%, an increase from its earlier estimate of 8% to 9%.
Pepsi continues to face challenges in the U.S. market as well, as consumers increasingly favor products that promote weight loss and healthier lifestyles. Earlier this month, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.