Consumers in the U.S. are increasingly delaying soda purchases due to the popularity of weight loss medications and non-alcoholic beverages.
Despite this trend, Coca-Cola reported strong earnings for the second quarter, fueled by high global demand for its soda products. In a financial update, CEO James Quincey expressed optimism about the company’s performance, noting solid growth in revenue and operating income in a fluctuating market.
However, Coca-Cola experienced a 1% decline in volume sales in North America during the quarter. Quincey attributed this decrease to weaker sales in places away from home, impacting beverages like coffee, tea, and soda. The downturn was somewhat mitigated by the success of Fairlife milk and the Coke brand, which ranked first and second in retail sales growth for the quarter.
To address the sales decline, Coca-Cola is collaborating with food chains, including McDonald’s, to incorporate its soda into value meal offerings. This initiative aims to revitalize customer interest and boost sales.
Overall, Coca-Cola surpassed Wall Street expectations, reporting revenue of $12.4 billion, equating to approximately $0.84 per share. Analysts had anticipated revenue of $11.76 billion and earnings of roughly $0.81 per share, according to FactSet.
The company revised its forecast for organic revenue growth to between 9% and 10%, increasing its earlier estimate of 8% to 9%.
Similarly, Pepsi has faced challenges in attracting U.S. consumers who are leaning towards healthier choices. In July, Pepsi reported that a series of recalls had negatively impacted its performance for the second quarter.