Coca-Cola beat Wall Street estimates for fourth-quarter revenue as the beverage maker benefited from higher product prices and buoyant demand, especially for its namesake drink.
Consumers who have started to prefer dining out and indulging in experiences like movies and sports are willing to spend more for their favourite drinks and snacks, which have become pricier over the last several quarters.
Last week, however, PepsiCo forecast weak annual organic revenue growth and posted a sales decline for the first time in 14 quarters as the company's move to further raise prices began to dent its volumes, unlike rival Coca-Cola.
But for Coca-Cola, unit case volumes rose 2% and average selling prices increased 9% in the fourth quarter. Still, the Sprite maker forecast weak growth in organic revenue as benefits from price hikes taper off.
Outlook 2024
Coca-Cola expects fiscal 2024 organic revenue to grow between 6% and 7%, compared to the 12% rise seen in 2023.
It expects annual adjusted profit to be between 4% and 5%, compared to expectations of a 4.5% growth, according to LSEG data.
Like several US companies such as Under Armour and Procter & Gamble, Coca-Cola too is seeing a drop in input and freight costs from their pandemic peaks.
That along with the price increases during the quarter helped Coca-Cola post an operating margin of 21% compared with 20.5% a year ago.
Its net revenue rose to $10.95 billion (€10.18 billion) compared with $10.20 billion (€9.48 billion) a year earlier, while analysts estimated $10.68 billion (€9.93 billion).
Annual Performance
For the full year, net revenues increased 6% to $45.8 billion (€42.63 billion), while organic revenues (non-GAAP) grew 12%, driven by 10% growth in price/mix and 2% growth in concentrate sales, the company noted.
“During the year, our people and partners rose to meet new challenges, allowing us to excel globally and deliver in a dynamic world,” said James Quincey, chairperson and CEO of The Coca-Cola Company.
“As we begin a new year, we’re confident that our all-weather strategy, powerful portfolio and harmonised system will continue to create value for our stakeholders in 2024 and for the long term.”
Read More: Coca-Cola The Best Performing FMCG Brand In 'Best Global Brands' Report
News by Reuters, additional reporting by ESM.
