Coca-Cola Overcomes Falling Demand In North America And Puts Up Strong Fourth Quarter Sales

Coca-Cola reported higher-than-expected sales in the fourth quarter, with growth in Mexico, Germany, and other areas offsetting weaker demand in the United States.

According to the Atlanta beverage giant on Tuesday, revenue increased 7% to $10.8 billion in the October-December period, according to FactSet analysts, which exceeded Wall Street’s projection of $10.7 billion.

Coca-Cola Overcomes Falling Demand In North America And Puts Up Strong Fourth Quarter Sales

Coke’s revenue increased by 10% in 2023 as prices rose, but the corporation attributed this to hyperinflationary conditions in a few areas, like Argentina. The company forecasts full-year organic sales to expand at a more moderate rate of 6% to 7% this year, down from 12% last year.

“We anticipate hyperinflationary pricing will continue to play a role in 2024, but will moderate throughout the year,” Coke Chief Financial Officer John Murphy said during an investor conference call.

Unit case volumes increased by 2% during the quarter, with effervescent soft drinks, juices, and Coca-Cola Zero Sugar leading the way. Sports drinks, coffee, and tea all experienced decreased demand.

Coca-Cola Overcomes Falling Demand In North America And Puts Up Strong Fourth Quarter Sales

In North America, unit case volumes decreased 1% as falling demand for water, sports drinks, coffee, and tea offset rising sales of juice, dairy products, and Coca-Cola. Coke stated its North American prices increased by 8% in the fourth quarter and the whole year.

Chairman and CEO James Quincey stated that price rises have certainly impacted some consumers, who are going out less and buying more drinks for the home. However, he stated that Coke continues to see great buying power from other consumers, who prefer higher-priced beverages such as Fairlife milk, Core Power protein smoothies, and Simply juices.

“There’s clearly multiple things going on in the landscape in terms of categories and price points and we’ve been working to address both ends of those,” he added.

Coca-Cola Overcomes Falling Demand In North America And Puts Up Strong Fourth Quarter Sales

Unit case volumes increased in Coke’s other global markets, though the company reported a decrease in demand due to the Middle East war. Several other major U.S. corporations, like Starbucks and McDonald’s, have suffered sales disruptions due to the war.

Net income decreased 3% to $1.9 billion, or 46 cents per share. Without one-time expenses, such as restructuring expenditures, the corporation earned 49 cents per share. That was consistent with Wall Street’s forecast.

Coke shares were flat in early trading.

source- (AP)