Consumers in the U.S. are increasingly avoiding sodas, influenced by weight loss medications and non-alcoholic alternatives. Despite this trend, Coca-Cola reported strong second-quarter earnings, fueled by high global demand for its beverages, leading the company to raise its projections for the year.
Coca-Cola’s CEO, James Quincey, noted, “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, attributed to decreased demand in various channels, including water, sports drinks, coffee, tea, and soda.
The decline was somewhat balanced by the success of Fairlife milk and Coca-Cola products, which performed well in retail sales growth. To address the volume drop, Coca-Cola is collaborating with food chains, particularly McDonald’s, to bundle its sodas with combo meals, aiming to enhance sales.
Coca-Cola exceeded Wall Street expectations with reported revenues of $12.4 billion in the second quarter, translating to about $0.84 per share, surpassing forecasts of $11.76 billion or approximately $0.81 per share. The company has now revised its organic revenue growth forecast to between 9% and 10%, up from a previous estimate of 8% to 9%.
Meanwhile, Pepsi is facing challenges as U.S. consumers show a stronger preference for health-oriented products. The company pointed to product recalls as a reason for its lackluster second-quarter results.