Consumers in the U.S. are increasingly delaying soda purchases, influenced by the popularity of weight loss drugs and non-alcoholic alternatives. Despite this trend, Coca-Cola reported strong second-quarter earnings, driven by robust global demand for its beverage offerings, prompting the company to increase its full-year guidance.
Coca-Cola’s CEO, James Quincey, expressed satisfaction with the company’s performance, highlighting solid growth in revenue and operating income amid a shifting market. However, the company experienced a 1% decline in volume sales in North America during the quarter, attributed to reduced consumer activity in various locations, particularly for water, sports drinks, coffee and tea, and sodas.
This decline was partially balanced by the success of Fairlife milk and Coca-Cola’s flagship soda, which ranked first and second in retail sales growth for the period. To counter the sales dip, Coca-Cola is collaborating with food chains to incorporate its sodas into combo meals, with a notable partnership aimed at enhancing McDonald’s $5 meal deal.
Coca-Cola surpassed Wall Street expectations, reporting $12.4 billion in revenue for the second quarter, translating to approximately $0.84 per share. Analysts had predicted revenues of around $11.76 billion, or roughly $0.81 per share.
Looking ahead, Coca-Cola has adjusted its organic revenue growth forecast to between 9% and 10%, raising its previous estimate of 8% to 9%.
Similarly, Pepsi has faced challenges in capturing consumer interest in the U.S., as more individuals prioritize weight loss and healthier choices. The company has pointed to a series of product recalls as a factor contributing to its lackluster performance in the second quarter.