Coca-Cola is experiencing solid growth despite challenges in the U.S. market due to shifting consumer preferences towards weight loss products and non-alcoholic beverages. The company’s strong second-quarter earnings, announced on Tuesday, reflect robust global demand for its products, leading Coca-Cola to raise its full-year guidance.
CEO James Quincey expressed optimism about the results, noting significant growth in both revenue and operating income amidst changing market conditions. However, North American volume sales saw a 1% decline during the quarter. Quincey attributed this drop to a decrease in sales from away-from-home channels, which encompass beverages such as water, sports drinks, coffee, tea, and sodas.
To mitigate the impact of the sales decline, Coca-Cola’s Fairlife milk and its flagship soda, Coke, helped offset some losses, securing first and second spots in retail sales growth for the quarter. To further encourage consumption, Quincey indicated that Coca-Cola is collaborating with food chains, including McDonald’s, to integrate its beverages into combo meal deals.
Financially, Coca-Cola surpassed Wall Street’s projections with second-quarter revenue of $12.4 billion, translating to earnings of about $0.84 per share, exceeding the anticipated $11.76 billion in revenue and $0.81 per share earnings.
Additionally, the company has adjusted its forecast for organic revenue growth, now predicting an increase of 9% to 10%, up from the earlier estimate of 8% to 9%.
Meanwhile, Pepsi is facing difficulties in attracting U.S. consumers, who are increasingly opting for products that align with healthier lifestyles. In July, Pepsi reported a subdued second quarter, partly due to a series of product recalls impacting its sales.