COCA-COLA raised its annual organic sales and profit forecasts on Tuesday (Jul 23), signalling consumers are willing to spend more for the beverage giant’s higher-priced sodas, energy drinks and juices mainly in international markets.
The company’s shares rose nearly 1 per cent in premarket trading as the company also posted a surprise increase in quarterly revenue.
Coca-Cola has been foraying into newer regions in Asia and Europe to keep its revenue growth intact and launching reformulated versions of its drinks such as Coke Spiced and Georgia Coffee in markets that are quickly turning price-sensitive.
The company’s average selling price rose 9 per cent in the second quarter, the Sprite maker said, while unit case volumes increased 2 per cent.
However, Coca-Cola saw volumes in the North America region fall by 1 per cent as consumers continue to be cautious with their spending.
PepsiCo CEO Ramon Laguarta said in July that there is “much more price sensitivity” across US income groups and not just low-income consumers.
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New York-based rival PepsiCo missed second-quarter revenue estimates as frequent price hikes and competition from private-label brands resulted in falling sales of its snacks and soda mainly in the US.
Coca-Cola forecast fiscal 2024 organic sales to grow between 9 per cent and 10 per cent, compared with its previous expectation of an 8 to 9 per cent rise.
The company expects fiscal 2024 adjusted profit to increase between 5 per cent and 6 per cent, compared with its previous forecast of a 4 to 5 per cent rise.
Coca-Cola’s second-quarter net revenue rose 2.9 per cent to US$12.31 billion beating LSEG estimates of US$11.76 billion.
On an adjusted basis, the company earned 84 cents per share, compared with estimates of 81 cents. REUTERS
