Coca-Cola raises outlook as shoppers withstand price hikes

COCA-COLA raised its full-year outlook, citing strong year-to-date performance despite price increases and other pressures on the consumer’s wallet.

With the ongoing willingness of consumers to pay steadily higher prices for beverages, the company now expects 2023 full-year organic revenue growth of 10 per cent to 11 per cent, and adjusted profit growth of 7 per cent to 8 per cent.

Coca-Cola had earlier said it expected 8 per cent to 9 per cent organic revenue growth for the full year, and adjusted profit growth of 5 per cent to 6 per cent from US$2.48 per share in 2022. Analysts had expected US$2.64 per share for full-year adjusted earnings and organic revenue growth of about 9.9 per cent.

The Atlanta-based company “delivered an overall solid quarter”, CEO James Quincey said.

Price mix – or price changes across a range of products and packaging – grew by 9 per cent. Analysts were expecting a price-mix increase of 6.2 per cent. Volume rose 2 per cent, also beating estimates.

In North America, where prices increased by 5 per cent during the quarter, volumes were flat. The company said in July that it expected volumes to increase in the second half of the year.

Coca-Cola also reported third-quarter adjusted earnings that exceeded expectations as consumers continued to buy its sodas, fruit drinks and sports drinks. The company’s brands include Sprite and Fanta sodas, as well as Minute Maid and Simply juices.

Coca-Cola’s main rival, PepsiCo, reported a 2.5 per cent volume decline for the third quarter earlier this month, including a drop of 6 per cent in its North America beverages business.

Still, PepsiCo increased its 2023 core constant-currency earnings per share growth forecast to 13 per cent from 12 per cent, and maintained its organic revenue growth target of 10 per cent for the year.

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Coca-Cola shares rose 2.2 per cent in early trading in New York. The stock has slumped 15 per cent year to date as at Monday’s close, worse than the 9 per cent decline of the S&P 500 consumer-staples index. BLOOMBERG