Coca-Cola recently announced an increase in its full-year outlook after experiencing a rise in global demand for its beverages in the second quarter. The company now expects organic revenue growth for 2024 to be between 9% to 10%, up from its previous forecast of 8% to 9%. Additionally, the company has raised its outlook for comparable earnings growth to a range of 5% to 6%, compared to the earlier range of 4% to 5%.
Financial Performance
In the second quarter, Coca-Cola reported earnings per share of 84 cents adjusted, surpassing analysts’ expectations of 81 cents. The company’s revenue also exceeded estimates, coming in at $12.36 billion compared to the expected $11.76 billion. Despite a slight decrease in net income attributable to shareholders from the previous year, the beverage giant’s performance remained strong.
Coca-Cola’s global unit case volume saw a rise of 2% in the second quarter, driven by strong performance in international markets. However, in North America, volume declined by 1%, primarily due to lower demand for water, sports drinks, coffee, tea, and soda. On the other hand, the company experienced growth in juice, dairy, and plant-based beverages.
Comparison with Competitors
While Coca-Cola reported an increase in demand for its sparkling soft drinks division, its competitor PepsiCo noted a weakening U.S. consumer market affecting sales of drinks and snacks. Coca-Cola’s juice, dairy, and plant-based beverages saw a volume growth of 2%, while its water, sports, coffee, and tea division remained flat due to reduced demand for bottled water and declining Costa coffee sales.
Coca-Cola faced challenges related to foreign currency fluctuations, with a 9% increase in overall prices compared to the previous year. A significant portion of this increase was driven by hyperinflation in certain markets like Argentina. Looking ahead, the company anticipates a 4% currency headwind on comparable net sales and an 8% currency headwind on comparable earnings per share for the third quarter.
Coca-Cola’s improved outlook and performance in the second quarter reflect the company’s ability to adapt to changing market conditions and consumer preferences. However, challenges such as currency fluctuations and regional market variations continue to pose risks to its future growth and profitability.