Coca-Cola reported earnings and revenue for the third quarter beating analysts’ expectations, driven by higher prices that offset a decline in global demand.
The beverage giant posted a net income of $2.85bn, or 66 cents per share, down from $3.09bn, or 71 cents per share, in the same period last year. Excluding certain items, earnings stood at 77 cents per share, surpassing analysts’ expectations.
The company’s adjusted net sales remained relatively stable at $11.95bn, while organic revenue—excluding the effects of acquisitions, divestitures, and currency fluctuations—grew by nine per cent during the quarter.
However, unit case volume, which reflects consumer demand without the influence of pricing or currency, fell by one per cent.
The decline in volume was attributed to softer demand in some international markets, as price-sensitive consumers reacted to persistent inflation.
Coca-Cola noted that while demand in North America was flat, international markets such as Europe, the Middle East, Africa, and Asia-Pacific experienced a 2 per cent drop in unit case volume. Specific declines were highlighted in China and Turkey, while Latin American demand remained stable.
Despite these challenges, Coca-Cola has continued to outperform its key competitor, PepsiCo. Pepsi has faced struggles with volume declines, particularly in its North American beverage segment, which saw a 3 per cent drop in the third quarter.
This downturn has been compounded by product recalls from its Quaker Foods division and reduced consumer demand for snacks and beverages.
Coca-Cola’s North American performance saw growth in its core soda products and newer categories like plant-based beverages, juices, and sparkling flavors. However, declining sales in water, sports drinks, coffee, and tea offset those gains.
Coca-Cola’s pricing strategies have allowed it to navigate the challenging landscape, but the company remains cautious as global economic pressures continue to weigh on consumer behavior.
Globally, volume for Coke’s sparkling soft drinks, like Sprite, and for its namesake soda were both flat for the quarter. The company’s juice, dairy and plant-based beverages division reported a 3 per cent decline in volume. Its water, sports, coffee and tea segment saw volume fall 4 per cent, fueled by a 6 per cent drop in bottled water.