In the United States, the popularity of weight loss drugs and non-alcoholic beverages is causing a decline in soda sales among consumers. Despite this trend, Coca-Cola reported strong second-quarter earnings on Tuesday due to robust global demand for its products, prompting the company to raise its full-year guidance.
James Quincey, CEO of Coca-Cola, expressed satisfaction with the company’s performance, highlighting solid growth in both revenue and operating income amidst an evolving market. However, in North America, Coca-Cola experienced a 1% drop in volume sales during the quarter, primarily attributed to reduced performance in away-from-home channels, which encompass its water, sports drinks, coffee, tea, and soda products.
This decline was partially mitigated by the success of its Fairlife milk line and the popularity of Coke, which ranked first and second in retail sales growth for the quarter. To counteract the decrease, Coca-Cola is partnering with food chains to include its beverages in meal combo offerings. Notably, the company is collaborating with McDonald’s to enhance their $5 meal deal, which features a soft drink.
Overall, Coca-Cola surpassed Wall Street expectations with reported revenues of $12.4 billion for the second quarter, equivalent to approximately $0.84 per share, compared to the anticipated $11.76 billion and $0.81 per share. The company is now forecasting organic revenue growth of 9% to 10%, up from its previous estimate of 8% to 9%.
Similarly, Pepsi has faced challenges in attracting U.S. consumers who are increasingly favoring healthier options. In early July, Pepsi attributed its lackluster second quarter to a series of product recalls.