Coca-Cola has reported strong second-quarter earnings, benefiting from increased global demand for its beverage products, leading the company to raise its full-year forecast. CEO James Quincey expressed optimism about the results, noting significant top-line and operating income growth despite a challenging market.
However, in North America, Coca-Cola experienced a 1% decline in volume sales. Quincey explained during the earnings call that this downturn was largely due to weaker performance in “away-from-home channels,” which encompasses its offerings in water, sports drinks, coffee, tea, and sodas. The decline was somewhat mitigated by the success of its Fairlife milk brand and its flagship soda, Coke, which ranked first and second in retail sales growth, respectively.
To combat the volume decrease, Coca-Cola is collaborating with food chains to incorporate its sodas into combo meals. Reports indicate the company is working with McDonald’s to enhance the visibility of the fast-food chain’s $5 meal deal, which includes a soft drink.
Financially, Coca-Cola outperformed Wall Street’s expectations in the second quarter, posting revenue of $12.4 billion, translating to about $0.84 per share, while analysts had predicted revenues of $11.76 billion and earnings of roughly $0.81 per share.
The company’s new outlook anticipates organic revenue growth between 9% and 10%, an increase from its earlier forecast of 8% to 9%.
Meanwhile, Pepsi is also facing challenges in attracting U.S. consumers who are increasingly inclined towards weight loss and healthier options. Recent trends show that young adults in the U.S. are consuming significantly less alcohol than before, according to a Gallup poll. In early July, Pepsi attributed its subdued second-quarter performance to a series of product recalls.