Beverage giant Coca-Cola raised its annual organic sales forecast after beating first-quarter revenue and profit expectations as customers shell out more money for the company's pricey sodas and juices globally.
The company is seeing demand in the US surge mainly in the away-from-home category as consumers venturing out for movies and dining are willing to spend on its higher-priced sodas and juices.
Both Coca-Cola and PepsiCo are also enjoying buoyant demand for their products in international markets such as Europe and Asia where relaunches of Georgia Coffee, Sprite reformulations and a foray into newer markets have helped bump up sales.
“We’re encouraged by our start to 2024, delivering another quarter of volume, topline and earnings growth amidst a dynamic backdrop,” said James Quincey, chair and CEO of The Coca-Cola Company. “We believe our global system is primed for sustained success, thanks to the right strategies, clear alignment, a powerful portfolio and strong execution.”
Quarterly Highlights
Coca-Cola's organic revenue in Europe, Middle East and Africa rose 15% in the first quarter, while in North America it increased 7%.
The company's average selling prices rose 13%, the company said, while unit case volumes were up only 1%.
Packaged food companies have now started to promote heavily and overhaul their existing products as well as introduce newer items to spur demand at a time when lower-income customers are buying less due to strained budgets.
Coca-Cola has also increased the number of weeks that retailers promote its 1.25-litre sodas as part of a value bundle targeted at price-conscious consumers.
The soda giant expects fiscal 2024 organic sales to grow 8% to 9%, compared with a previous forecast of a 6% to 7% rise.
The company's net revenue rose 2.5% to $11.23 billion (€10.5 billion) in the first quarter beating analysts' estimates of $11.01 billion (€10.3 billion), according to LSEG data.
On an adjusted basis, the company earned 72 cents per share, compared with expectations of 70 cents.
However, Coca-Cola maintained its annual comparable earnings per share forecast of 4% to 5% growth.
News by Reuters, additional reporting by ESM.
