Coca-Cola has reported strong second-quarter earnings bolstered by robust global demand for its beverages, prompting the company to raise its full-year forecasts. CEO James Quincey expressed optimism about the results, which showed solid growth in top-line and operating income amid a changing market.
Despite the overall success, Coca-Cola experienced a 1% decline in volume sales in North America during the quarter. Quincey noted that this dip was attributed to weaknesses in ‘away-from-home’ channels, encompassing its range of products including water, sports drinks, coffee, tea, and sodas. However, the decline was partly mitigated by strong performances from Fairlife milk and Coke, which ranked first and second in retail sales growth, respectively.
To counteract falling sales, Coca-Cola is collaborating with fast-food chains to integrate its sodas into combo meals, particularly working with McDonald’s to enhance the appeal of its $5 meal deal that includes a soft drink.
The company’s second-quarter revenue reached $12.4 billion, surpassing Wall Street’s expectations of $11.76 billion in revenue, translating to about $0.84 per share compared to the anticipated $0.81. Coca-Cola has also revised its forecast for organic revenue growth to between 9% and 10%, up from the previous estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting American consumers, who are gravitating towards products focused on weight loss and healthier lifestyles. A recent Gallup poll indicates that young adults in the U.S. are consuming significantly less alcohol than in previous years. In early July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.