The Coca-Cola Co. posted strong sales in the second quarter due to price increases and rising demand from restaurants, theme parks and other venues.
The company also raised its revenue expectations today, saying that it now expects organic revenue growth of between 12% and 13% for the full year. That’s up from earlier projections of a 7% to 8% increase.
Revenue grew 12% in the April-June period to $11.3 billion, the Atlanta company said. That was well ahead of the $10.56 billion Wall Street forecast, according to analysts polled by FactSet.
Coke said it has raised prices globally to compensate for higher ingredient and freight costs. Coke Chairman and CEO James Quincey said those higher prices aren’t yet impacting demand.
But Quincey said it’s difficult to get a clear read on consumers right now. There are early signs that lower-income buyers are trading down to cheaper food brands in groceries and convenience stores, for example, but travel and leisure demand —— at baseball stadiums and theme parks, for example —— is extremely strong.
“This post-COVID re-prioritization of spend by consumers is layered over what feels like a squeeze on purchasing power,” Quincey said today on a conference call with investors. “How that’s all going to net out in the second half and going into next year, there are a lot of opinions, and I don’t think anyone’s going to know until we actually get there.”
Coca-Cola Zero Sugar sales grew 12% in the quarter on strong global demand. Coffee sales rose 15% as Coke placed its Costa coffee brand in new markets.
In North America, case volumes were up 2%. Coke benefited from higher prices as well as strong sales of premium drinks like Fairlife milk and Smartwater.
Higher operating costs and increased spending on marketing impacted its profits. Coke said its net income fell 28% to $1.9 billion for the quarter. That included losses related to the suspension of its business in Russia due to its invasion of Ukraine.
Excluding one-time items, Coke earned 70 cents per share in the quarter. That was also better than the 67 cent profit that Wall Street had expected.
Coca-Cola shares rose 1% in morning trading.
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