Weight loss medications and non-alcoholic alternatives are leading U.S. consumers to reduce their soda purchases. Despite this trend, Coca-Cola reported strong earnings for the second quarter, buoyed by robust global demand for its beverages, which has allowed the company to raise its full-year guidance.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, stating, “We are encouraged with our second-quarter results, which delivered solid topline and operating income growth in an ever-changing landscape.”
However, North America saw a 1% decline in volume sales during the quarter. Quincey attributed the drop in the U.S. market to “softness in away-from-home channels,” which includes products such as water, sports drinks, coffee, tea, and sodas.
This decline was somewhat mitigated by successful sales of Fairlife milk and the Coca-Cola brand itself, which registered strong retail sales growth. To counteract these challenges, Coca-Cola plans to collaborate with food chains to integrate its sodas into combo meal offerings, including a partnership with McDonald’s to enhance its $5 meal deal, which includes a soft drink.
Coca-Cola exceeded Wall Street expectations, reporting $12.4 billion in revenue for the second quarter, equating to about $0.84 per share, which surpassed the forecast of $11.76 billion and $0.81 per share.
The company also adjusted its forecast for organic revenue growth, increasing it to a range of 9% to 10%, up from the previous estimate of 8% to 9%.
Meanwhile, Pepsi is facing similar challenges in attracting U.S. consumers, who are leaning toward healthier options. The company reported weaker performance, blaming a series of product recalls for its lackluster second-quarter results.