In the United States, the popularity of weight loss medications and non-alcoholic beverages has led consumers to purchase fewer sodas. Despite this trend, Coca-Cola reported strong earnings for the second quarter, largely due to high global demand for its products, which prompted the company to raise its full-year forecast.
James Quincey, CEO of Coca-Cola, expressed optimism about the company’s second-quarter performance, citing solid growth in both revenue and operating income despite a challenging market.
However, there was a 1% decline in volume sales in North America during the quarter. Quincey attributed this decrease to weaker performance in channels outside the home, which includes water, sports drinks, coffee, tea, and sodas.
Part of this decline was offset by the success of Coca-Cola’s Fairlife milk brand and its flagship soda, Coke, which ranked first and second in retail sales growth for the quarter. To counter the downturn, Coca-Cola is collaborating with food chains to include its sodas in combo meal deals, with efforts reportedly underway with McDonald’s to enhance its $5 meal offer, which comes with a soft drink.
Coca-Cola’s overall performance exceeded Wall Street expectations, with the company reporting $12.4 billion in revenue for the second quarter, translating to approximately $0.84 per share. Analysts had anticipated revenue of around $11.76 billion, or roughly $0.81 per share, according to FactSet.
The company has now updated its forecast for organic revenue growth to between 9% and 10%, an increase from the previous estimate of 8% to 9%.
Similar to Coca-Cola, Pepsi is also facing challenges in attracting U.S. consumers, who are increasingly opting for products that support weight loss and healthier lifestyles. In early July, Pepsi cited a series of recalls as a reason for its lackluster performance in the second quarter.