Subscribe Login
Drinks

Coca-Cola Raises Revenue Forecast As Soda Demand Defies Price Hikes

By Dave Simpson

Coca-Cola Co KO.N has lifted its full-year revenue forecast, encouraged by buoyant demand for sugary sodas in the face of price increases to combat higher costs.

Details

Global sales volumes rose 8% in the second quarter, the company said, powered by growth in both developed and emerging markets, while average selling prices increased about 12%.

The Dow component's shares were up 2.2% in early trading on Tuesday 26 July, while the broader market was down after top US retailer Walmart Inc WMT.N cut its full-year profit expectations on a slowdown in discretionary spending.

Get a FREE Digital Subscription!

Enjoy full access to Hospitality Ireland, our weekly email news digest, all website and app content, and every digital issue.

Processing your request...

Thanks! please check your email to confirm your subscription.

By signing up you are agreeing to our Terms & Conditions and Privacy Policy

"Coke's results are testament to its brand value because consumers are unwilling to trade down to other colas, despite increasing prices," CFRA analyst Garrett Nelson said.

The results highlight the resilience of packaged food makers, especially in the United States, as consumers prioritize spending on eating at home rather than at restaurants.

Coca-Cola chief executive James Quincey said the company would increases prices further in markets where costs were increasing and aim to pass most of them to consumers before a potential recession.

Rival PepsiCo Inc PEP.O also provided similar views last week. The company said it had not seen any slowdown in demand and added there was room for prices to go further up.

Coca-Cola was preparing for an economic downturn with investments in smaller and cheaper packaging, Quincey said, but added the company's products have historically been among the last to see a slowdown in demand during recessions.

Net revenue rose 12% to $11.3 billion in the quarter ended July 1, beating analysts' expectations of $10.55 billion, according to Refinitiv IBES data.

Still, the results laid bare the impact of higher expenses. Comparable operating margin fell to 30.7% from 31.7%.

Organic Revenue

Organic revenue, which excludes the impact of a stronger dollar, is expected to rise 12% to 13% in 2022, compared to prior expectation of 7% to 8% increase.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

Enjoy a FREE Digital Subscription
Enjoy full access to Hospitality Ireland, our weekly email news digest, all website and app content, and every digital issue.
Enjoy a FREE Digital Subscription
Enjoy a FREE Digital Subscription
Enjoy full access to Hospitality Ireland, our weekly email news digest, all website and app content, and every digital issue.
Enjoy a FREE Digital Subscription