Coca-Cola, the iconic beverage company, reported impressive second-quarter results for 2024, surpassing Wall Street expectations and raising its full-year outlook. Global demand for Coca-Cola's drinks rose in the second quarter, leading to a net sales increase of 3% to $12.36 billion. The company now expects organic revenue growth of 9% to 10% for the year, up from its previous forecast of 8% to 9%, and comparable earnings growth of 5% to 6%, up from a range of 4% to 5%.
Coca-Cola's unit case volume rose by 2%, driven by strong demand in international markets, particularly in Asia Pacific and Latin America. The company's sparkling soft drinks division reported a 3% increase in global volume, while the juice, dairy and plant-based beverages business saw volume growth of 2%.
Despite price increases not deterring consumers in international markets, Coca-Cola's North American volumes fell by 1% due to declines in water, sports, coffee tea, trademark Coca-Cola and other soda brands. This was offset by growth in juice, dairy and plant-based beverages. The company anticipates a 4% currency headwind to its comparable net sales and an 8% currency headwind to its comparable earnings per share for the third quarter due to the strong US dollar.
Coca-Cola's average selling price rose by 9%, with about half of that increase coming from hyperinflation in certain markets, such as Argentina. The company has been expanding into new regions in Asia and Europe to maintain revenue growth while offering budget-friendly options like 12-ounce slim cans and a wider variety of drinks, including Coke Spiced.
In contrast to rival PepsiCo, Coca-Cola has been less aggressive with price increases, catering to different price points in the market. However, fast food chains that are major sellers of Coca-Cola and PepsiCo products are feeling the pinch of tighter consumer budgets. According to AJ Bell's Danni Hewson, keeping existing customers happy gives Coca-Cola the opportunity to win over new drinkers at a time when some rivals, like PepsiCo, are facing challenges with consumers who are more price-sensitive.
In summary, Coca-Cola's strong second-quarter results and raised full-year outlook demonstrate the company's ability to adapt to changing consumer preferences and global economic conditions. Its focus on international expansion and budget-friendly options positions it well for continued growth in the future.