In the United States, the popularity of weight loss medications and non-alcoholic alternatives is leading consumers to reduce their soda purchases. Despite this trend, Coca-Cola reported strong earnings for the second quarter, fueled by solid global demand for its products, which prompted the company to revise its full-year forecasts upward.
Coca-Cola 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, the North American market saw a 1% decline in volume sales during the quarter. Quincey attributed this dip to reduced activity in away-from-home channels, which encompasses its product lines including water, sports drinks, coffee, tea, and sodas. The decline was partially balanced by growth in its Fairlife milk brand and strong sales of its flagship Coca-Cola product, which ranked first in retail growth for the period.
To address the sales decline, Coca-Cola is collaborating with fast-food chains to integrate its beverages into combo meals. Notably, the company is reportedly partnering with McDonald’s to enhance the appeal of its $5 meal deal, which includes a soft drink.
Overall, Coca-Cola outperformed Wall Street expectations, reporting $12.4 billion in revenue for the second quarter, translating to about $0.84 per share. Analysts had anticipated revenue of approximately $11.76 billion, or about $0.81 per share.
The company has now increased its projection for organic revenue growth to between 9% and 10%, up from the previous estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in the competitive U.S. market as consumers increasingly favor health-conscious products. Earlier in July, Pepsi attributed its lackluster second quarter results to a series of product recalls.