Coca-Cola is raising its full-year sales guidance after a stronger-than-expected second quarter boosted by continued price increases.
The Atlanta beverage giant said Tuesday it now expects organic sales to grow between 9% and 10% this year, up from 8% to 9% previously.
Revenue rose 3% to $12.4 billion for the April-June period. That was higher than Wall Street anticipated. Analysts polled by FactSet were expecting revenue of $11.8 billion.
Coke, which hiked prices 13% in the first quarter, raised them 9% in the April-June period. The company said that was partly due to hyperinflation in some markets, like Argentina. Coke has raised prices every quarter since the end of 2020.
But price increases appear to be hurting demand at home. North American unit case volume sales fell 1% after Coke raised prices 11% in the market. Coke said growing sales of juice, dairy and plant-based drinks were offset by falling demand for water, sports drinks, sparkling sodas and trademark Coca-Cola.
In the Asia Pacific region, where Coke lowered prices 3%, unit case volume sales rose 3%.
Coca-Cola’s net income fell 5% to $2.4 billion, or 56 cents per share. Adjusted for one-time items, including currency fluctuations, Coke earned 84 cents per share. That also beat Wall Street’s forecast of 81 cents.
Before the opening bell, shares of The Coca-Cola Co. rose more than 1%.
Coke’s results were a contrast with rival PepsiCo, which tightened its full-year organic revenue guidance earlier this month after posting weaker-than-expected revenue in the second quarter. But unlike Coke, PepsiCo sells snack foods like Frito-Lay chips. Demand for those products have begun to fall after several years of price increases.
Coca-Cola, the world’s largest beverage company, has recently announced an increase in its full-year sales forecast following a strong second quarter performance. The company reported better-than-expected earnings and revenue for the quarter, driven by strong demand for its products in both developed and emerging markets.
In a statement released by Coca-Cola CEO James Quincey, he highlighted the company’s continued focus on innovation and marketing efforts as key drivers of its success. “We are pleased with our performance in the second quarter, which reflects the strength of our brand portfolio and the effectiveness of our marketing strategies,” Quincey said.
Coca-Cola’s revenue for the second quarter rose 6% to $10 billion, surpassing analysts’ expectations. The company also reported a 7% increase in unit case volume, driven by strong sales of its core brands such as Coca-Cola, Sprite, and Fanta. In addition, Coca-Cola’s revenue growth was supported by its expansion into new product categories, including energy drinks and ready-to-drink coffee.
As a result of its strong performance in the second quarter, Coca-Cola has raised its full-year sales forecast to 5-6% growth, up from its previous guidance of 4-5%. The company also expects its earnings per share to increase by 13-15% for the full year.
Analysts have praised Coca-Cola’s performance in the second quarter, noting that the company’s focus on innovation and marketing has helped drive growth in a challenging environment. “Coca-Cola’s ability to adapt to changing consumer preferences and introduce new products has been a key factor in its success,” said one analyst.
Looking ahead, Coca-Cola remains focused on driving growth through innovation and expanding its presence in key markets around the world. The company continues to invest in new product development and marketing initiatives to drive sales and strengthen its competitive position in the beverage industry.
Overall, Coca-Cola’s robust second quarter performance and increased full-year sales forecast demonstrate the company’s resilience and ability to deliver strong results in a dynamic market environment. With a strong brand portfolio and a focus on innovation, Coca-Cola is well-positioned for continued growth and success in the future.
