American consumers are increasingly hesitant to purchase sodas due to the rise of weight loss medications and non-alcoholic beverages. Despite this trend, Coca-Cola reported strong second-quarter earnings, largely due to global demand for its products. As a result, the company has raised its full-year revenue guidance.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s second-quarter performance, highlighting solid growth in both revenue and operating income amidst changing market conditions. However, in North America, the company experienced a 1% decline in volume sales, attributed to reduced sales in away-from-home channels, which encompass water, sports drinks, coffee, tea, and soda.
This decline was somewhat mitigated by the success of Fairlife milk and Coca-Cola itself, which ranked first and second in retail sales growth for the quarter. To counter the drop in volume, Quincey stated that Coca-Cola is collaborating with food establishments to make its beverages a part of combo meal deals, including a partnership with McDonald’s to enhance the fast-food chain’s $5 meal deal that features a soft drink.
Ultimately, Coca-Cola exceeded analyst expectations, reporting $12.4 billion in revenue for the second quarter, translating to about $0.84 per share. In comparison, analysts had anticipated $11.76 billion in revenue and earnings of roughly $0.81 per share.
Going forward, Coca-Cola has revised its forecast for organic revenue growth to between 9% and 10%, an increase from the previous estimate of 8% to 9%.
Similarly, Pepsi is confronting challenges in attracting U.S. consumers, who are favoring products that focus on weight loss and healthier lifestyles. In July, Pepsi attributed its lackluster second-quarter results to a series of product recalls.