Coca Cola Quarterly profit and revenue reported on Tuesday beat analysts’ expectations as consumers drank more of its Fanta and Fairlife drinks.
The beverage giant also raised its full-year organic revenue forecast.
The company’s shares rose less than 1% in premarket trading.
The company’s report compared with Wall Street expectations, according to a survey of analysts by London Stock Exchange Group (LSEG):
- Earnings per share: 72 cents adjusted, 70 cents expected
- Revenue: $11.30 billion, $11.01 billion expected
Coca-Cola reported first-quarter net income attributable to the company of $3.18 billion, or 74 cents per share, up from $3.11 billion, or 72 cents per share, in the same period last year.
The company also recorded a $760 million non-cash impairment charge for Bodyarmor. The company fully acquired the sports drink brand in 2021 for $5.6 billion.
Chief Financial Officer John Murphy said the charge reflected revised forecasts and a higher discount rate following the acquisition.this Sports drink category It’s becoming increasingly competitive as upstarts like Prime Energy grab market share.
Excluding this charge and other items, the beverage giant earned 72 cents per share.
net sales grew 3% to $11.3 billion. Organic sales, which exclude the impact of acquisitions, divestitures and foreign exchange, grew 11% in the quarter.
Coca-Cola reported that its global unit case sales rose 1%, but its North American sales were flat this quarter. This metric excludes pricing and foreign currencies.
Chief Executive James Quincey told analysts on the company’s conference call that sales in North America started the season slowly but continued to pick up in February and March. He said that although low-income customers have lost some purchasing power, American consumers “are still in good shape.”Some of Coca-Cola’s fast food partners e.g. McDonald’stheir U.S. sales slow as diners increase pull back their expenses.
Sales of Coca-Cola’s sparkling soft drinks unit, which includes its namesake soda, increased 2%. Coca-Cola has been tweaking the recipes of some drinks, such as Fanta and Sprite.
Sales in the company’s juice, dairy and plant-based beverage divisions rose 2% in the quarter, driven by demand in North America.
Only Coca-Cola’s water, sports, coffee and tea divisions posted sales declines. Sales in the segment fell 2% in the quarter as demand for bottled water, sports drinks and coffee all weakened.
Coca-Cola’s overall price is up 13% compared with the same period last year, but about half of that comes from hyperinflation in some markets, such as Argentina.
Coca-Cola now expects full-year organic revenue to grow 8% to 9%, higher than its previous forecast of 6% to 7%. The company said it expected prices to rise in some markets experiencing “significant inflation,” which led in part to its new outlook.
Coca-Cola reiterated its forecast for full-year comparable profit growth of 4% to 5%.
The company expects second-quarter comparable revenue to include a 6% currency headwind and a 5% to 6% hit from acquisitions, divestitures and structural changes. Currency fluctuations are also expected to create an 8% to 9% headwind to its comparable earnings per share.
