Coca-Cola has raised its full-year outlook after reporting stronger-than-expected earnings for the second quarter of 2024. The beverage giant's improved forecast comes amid rising global demand for its products, although North American sales have seen a decline.
For the full year, Coca-Cola now anticipates organic revenue growth between 9% and 10%, up from its prior forecast of 8% to 9%. Additionally, the company has adjusted its outlook for comparable earnings growth to a range of 5% to 6%, compared to the previous range of 4% to 5%. This optimistic revision has positively impacted the company's stock, which rose by about 1% in premarket trading.
The Atlanta-based company reported adjusted earnings per share of 84 cents, surpassing Wall Street's expectation of 81 cents, according to a survey by LSEG. Revenue for the quarter reached $12.36 billion, exceeding analysts' predictions of $11.76 billion. Despite this, the company's net income attributable to shareholders fell to $2.41 billion, or 56 cents per share, from $2.55 billion, or 59 cents per share, in the same period last year. Excluding specific costs such as restructuring charges and adjustments related to the Fairlife milk brand, adjusted earnings per share stood at 84 cents.
Coca-Cola's net sales increased by 3% to $12.36 billion, while organic revenue, which excludes the effects of acquisitions, divestitures, and foreign currency fluctuations, climbed 15%. This growth was largely driven by the company's performance in international markets, with overall unit case volume rising by 2% during the quarter.
However, the North American market presented a different story, with a 1% decline in volume. Coca-Cola reported that this decline affected several product categories, including water, sports drinks, coffee, tea, and its trademark Coca-Cola sodas. This drop in volume was somewhat offset by increased sales of juice, dairy, and plant-based beverages. PepsiCo, Coca-Cola's main rival, had similarly noted a weakening U.S. consumer demand impacting its beverage and snack sales earlier this month.
Coca-Cola's sparkling soft drinks division, which includes its flagship Coca-Cola brand, experienced a 3% increase in global volume, driven by strong demand in Asia Pacific and Latin America. The company's juice, dairy, and plant-based beverages saw a 2% volume growth, while the water, sports, coffee, and tea division reported flat volume, primarily due to decreased demand for bottled water and declining Costa coffee sales in the UK.
The company's pricing strategy, which included a 9% overall price increase compared to the same period last year, played a significant role in its financial performance. About half of this price hike was attributed to hyperinflation in certain markets, such as Argentina. For the third quarter, Coca-Cola anticipates continued challenges from foreign currency fluctuations, projecting a 4% headwind to comparable net sales and an 8% headwind to comparable earnings per share.
In the Asia Pacific region, where Coca-Cola reduced prices by 3%, unit case volume sales increased by 3%, illustrating the price sensitivity of the market and the effectiveness of strategic pricing adjustments.
