In the U.S., consumers are increasingly turning to weight loss drugs and non-alcoholic beverages, leading to a slowdown in soda sales. Despite this trend, Coca-Cola reported a strong performance for the second quarter, fueled by high global demand for its products. In light of these results, the beverage company raised its full-year revenue guidance.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s second-quarter performance, highlighting solid growth in both revenue and operating income amidst a challenging market. However, the company did experience a 1% decline in volume sales in North America. Quincey attributed this decrease to weaker performance in away-from-home channels, which encompass water, sports drinks, coffee, tea, and soda.
The decline was partly mitigated by the success of Coca-Cola’s Fairlife milk brand and the strong retail performance of its flagship soda, Coke, which ranked first and second in retail sales growth during the quarter.
To counteract the dip in soda sales, Coca-Cola is collaborating with food chains like McDonald’s to incorporate its products into combo meal offers. This initiative aims to enhance McDonald’s value meal deals that include soft drinks.
Overall, Coca-Cola exceeded analysts’ expectations, reporting $12.4 billion in revenue for the second quarter, averaging about $0.84 per share. Analysts had projected the company would earn approximately $11.76 billion, or around $0.81 per share, according to FactSet.
The company has now adjusted its forecast for organic revenue growth, expecting it to fall between 9% and 10%, an increase from its earlier estimate of 8% to 9%.
Similar to Coca-Cola, Pepsi is facing challenges in attracting U.S. consumers who are shifting towards healthier lifestyles and products aimed at weight loss. In early July, Pepsi attributed its lackluster second-quarter results to a series of product recalls.