Coca-Cola Exceeds Earnings Estimates, Raises Full-Year Outlook Amid Rising Global Demand

On July 23, Coca-Cola raised its full-year outlook as global drink demand rose in the second quarter. The company now expects organic revenue growth of 9% to 10% for 2024, up from its previous forecast of 8% to 9%.

Coca-Cola Raises 2024 Outlook Following Strong Q2 Performance Driven by Global Demand Increase

Coca-Cola increased its full-year outlook on July 23, following an increase in global drink demand during the second quarter.

For 2024, Coca-Cola expects organic revenue growth of 9% to 10%, up from its prior forecast of 8% to 9%. The company also increased its outlook for comparable earnings growth to 5% to 6% from 4% to 5%.

“Our updated 2024 guidance reflects the momentum of our business in the first half of the year and our confidence in our ability to execute our plans during the second half of this year,” CFO John Murphy said during Coca-Cola’s conference call.

Shares of the company rose around 1% in morning trading.

According to CNBC, here’s what Coca-Cola reported for the second quarter compared with Wall Street's expectations, based on a survey of analysts by LSEG:

• Earnings per share: 84 cents adjusted versus 81 cents expected

• Revenue: $12.36 billion versus $11.76 billion expected

Coca-Cola posted second-quarter net income attributable to shareholders of $2.41 billion, or 56 cents per share, down from $2.55 billion, or 59 cents per share, a year earlier. Excluding restructuring costs, charges related to the value of the Fairlife milk brand, and other items, the beverage giant earned 84 cents per share.

Net sales rose 3% to $12.36 billion. Organic revenue, which strips out acquisitions, divestitures, and foreign currency, climbed 15% in the quarter.

Coca-Cola’s unit case volume rose 2% for the quarter, thanks to its international markets—the metric strips out the impact of pricing and foreign currency to reflect demand.

Coca-Cola Faces North American Volume Decline Despite Global Growth in Sparkling and Plant-Based Beverages

In North America, however, volume fell 1% for the quarter. Coca-Cola reported that North American volume declined for its water, sports drinks, coffee, tea, trademark Coca-Cola, and other soda brands, offsetting growth for its juice, dairy, and plant-based beverages. Rival PepsiCo reported earlier this month that the U.S. consumer has weakened, hurting demand for its drinks and snacks.

Coca-Cola CEO James Quincey attributed weak sales in away-from-home channels to North America’s declining unit case volume. Coca-Cola is partnering with food service customers to boost demand and market food and drink combo meals. CNBC previously reported that Coca-Cola contributed marketing funds to McDonald’s for its $5 value meal, which includes a small soft drink, to make it more attractive to franchisees who can otherwise be wary of steep discounts.

Coca-Cola’s sparkling soft drinks division, including its namesake soda, saw its global volume rise 3%, thanks to strong demand in Asia-Pacific and Latin America. Its juice, dairy, and plant-based beverages business reported volume growth of 2%. The water, sports, coffee, and tea division saw flat volume, hurt by shrinking demand for bottled water and falling Costa coffee sales in the United Kingdom.

Coca-Cola’s overall prices were up 9% compared with the year-ago period, with about half of that increase coming from hyperinflation in specific markets, like Argentina.

For the third quarter, Coca-Cola anticipates that foreign currency will drag on its results again. The company forecasts a 4% currency headwind to its comparable net sales and an 8% currency headwind to its comparable earnings per share.