Coca-Cola has reported strong second-quarter earnings, boosted by global demand for its beverage offerings, prompting the company to increase its full-year guidance. CEO James Quincey expressed optimism about the results, highlighting solid growth in revenue and operating income amidst a changing market.
Despite this positive performance, Coca-Cola experienced a 1% decline in volume sales in North America. Quincey attributed this drop to weaker demand in away-from-home channels, which encompasses products like water, sports drinks, coffee, tea, and sodas. However, the decline was mitigated by growth in its Fairlife milk line and strong retail performance for Coca-Cola, which ranked first and second in growth during the quarter.
To address the sales decline, Coca-Cola is collaborating with food chains to include its sodas in combo meals. Reports suggest that the company is working with McDonald’s to enhance the fast-food chain’s $5 meal deal, which includes a soft drink.
Overall, Coca-Cola exceeded market expectations, reporting $12.4 billion in revenue for the second quarter, equating to approximately $0.84 per share. Analysts had predicted revenue of $11.76 billion, or about $0.81 per share. The company has now adjusted its forecast for organic revenue growth to between 9% and 10%, an increase from its earlier 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 lifestyles. According to a Gallup poll, young adults in the U.S. are drinking significantly less alcohol than in the past. In early July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.