In the United States, the rise of weight loss medications and non-alcoholic alternatives has prompted consumers to reduce their soda consumption. However, Coca-Cola reported strong earnings for the second quarter on Tuesday, buoyed by solid global demand for its beverage products, which led the company to increase 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.”
Despite the overall success, Coca-Cola experienced a 1% decline in volume sales in North America during the quarter. Quincey attributed this decline to “softness in away-from-home channels,” which encompasses their water, sports drinks, coffee and tea, and soda offerings. Nonetheless, the drop was partially mitigated by the success of Fairlife milk and the flagship product Coca-Cola, which ranked first and second in retail sales growth for the quarter.
To counteract the sales decline, Coca-Cola is collaborating with food chains to integrate its sodas into combo meals. The company is reportedly partnering with McDonald’s to enhance the fast-food chain’s $5 meal deal that includes a soft drink.
Overall, Coca-Cola surpassed Wall Street’s projections, reporting $12.4 billion in revenue for the second quarter, or approximately $0.84 per share. Analysts had anticipated revenue of $11.76 billion, or around $0.81 per share.
The company has revised its forecast for organic revenue growth to between 9% and 10%, an increase from its previous estimate of 8% to 9%.
Meanwhile, Pepsi is facing challenges in attracting U.S. consumers, who are increasingly opting for products that promote weight loss and healthier lifestyles. The company recently attributed its lackluster second quarter to a series of product recalls.