Weight loss medications and non-alcoholic beverages are causing American consumers to delay purchasing sodas.
Despite this trend, Coca-Cola reported strong second-quarter earnings, driven by robust global demand for its beverages, which led the company to raise its full-year guidance. CEO James Quincey expressed optimism about the company’s results, highlighting solid topline growth in a dynamic market.
However, Coca-Cola experienced a 1% decline in volume sales in North America during the quarter. Quincey pointed to weakened performance in away-from-home channels, including water, sports drinks, tea, and soda, as contributing factors.
The decline was slightly mitigated by the success of Fairlife milk and Coca-Cola itself, which ranked first and second in retail sales growth, respectively. To address the drop in sales, Quincey indicated that Coca-Cola is collaborating with food chains, such as McDonald’s, to incorporate its sodas into combo meals, particularly the fast food chain’s $5 deal.
Overall, Coca-Cola surpassed Wall Street expectations. The company reported $12.4 billion in revenue for the second quarter, equating to approximately $0.84 per share, exceeding forecasts of $11.76 billion and $0.81 per share.
Coca-Cola has raised its forecast for organic revenue growth 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 increasingly opting for products focused on weight loss and healthier habits. In July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.