Coca-Cola has raised its full-year outlook for the third consecutive quarter, despite flat sales volumes in its home market as consumers continue to seek value amid inflation and economic uncertainty.
The drinks group now expects comparable earnings per share to increase by at least 11%, up from its previous forecast of growth between 9% and 10%. It also lifted its forecast for organic revenue growth to at least 5%, from approximately 5%.
Coca-Cola shares rose by about 1% in pre-market trading.
For the third quarter, the company reported adjusted earnings of 91 cents a share, ahead of the 88 cents expected by analysts surveyed by LSEG. Revenue rose 7% to 13.4 billion dollars, exceeding expectations of 12.92 billion dollars.
Net income attributable to shareholders increased to 4.01 billion dollars, or 93 cents a share, from 3.7 billion dollars, or 86 cents a share, a year earlier. Organic revenue, which excludes acquisitions, disposals and currency movements, also climbed 7%.
Global unit case volume rose 5% for the second consecutive quarter, driven by stronger demand outside North America. Volume in North America was flat, although chief financial officer John Murphy said the region would have recorded growth without the timing of the Fourth of July holiday and a prolonged shortage of Topo Chico sparkling water.
“The underlying momentum remains quite strong,” Mr Murphy said. “Consumer sentiment is largely unchanged in the sense that, wherever you are on the income scale, you’re looking for value, and I think our system here has done a good job interpreting that.”
Coca-Cola said its global sparkling soft drinks division recorded 5% volume growth, supported by Coke, Coke Zero Sugar and Diet Coke. Mr Murphy described Diet Coke as experiencing a “resurgence”, saying the brand had been embraced by younger consumers in the US and had gained attention in India while shortages made it scarce.
“It’s a brand that’s almost reinventing itself with the next generation of consumers,” he said.
Mr Murphy said Coca-Cola had also gained market share as PepsiCo’s soft drinks business struggled, although he acknowledged that brands including Sprite still had “some work to do”.
Volume in Coca-Cola’s water, sports, coffee and tea division rose 5%, led by demand for water brands including Smartwater. Tea and coffee volumes were flat, while sports drinks declined. The company’s juice, value-added dairy and plant-based beverages division also reported flat volume, despite growth from brands such as Fairlife and Minute Maid.
