Coca-Cola reported strong second-quarter earnings, buoyed by robust global demand for its beverages, which led the company to raise its full-year guidance. CEO James Quincey expressed optimism about the results, highlighting solid growth in both revenue and operating income despite challenges in the market.
However, in North America, Coca-Cola experienced a 1% decline in volume sales. Quincey explained during an earnings call that this dip was influenced by decreased demand in away-from-home channels, including water, sports drinks, coffee, tea, and sodas. Despite these declines, growth from Fairlife milk and Coca-Cola’s flagship soda helped mitigate the overall decrease.
To address the volume drop, Coca-Cola is collaborating with food chains to incorporate its soft drinks in combo meal offers. Reports indicate the company is particularly focused on boosting McDonald’s $5 meal deal that includes a beverage.
Coca-Cola’s second-quarter revenue reached $12.4 billion, significantly exceeding Wall Street’s expectations of $11.76 billion. The company’s stock also performed well, earning around $0.84 per share compared to the anticipated $0.81.
Looking ahead, Coca-Cola revised its forecast for organic revenue growth to between 9% and 10%, up from the prior estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers as they increasingly shift towards weight loss-focused and healthier options. Recent trends indicate that young adults are reducing alcohol consumption, further impacting beverage choices. In early July, Pepsi cited a series of product recalls as a factor contributing to its soft second-quarter performance.