Coca-Cola reported first-quarter organic revenue growth that surpassed estimates as consumers absorbed higher costs for the company’s sodas, juices and energy drinks.
Organic revenue, which excludes the impact of currency shifts and acquisitions, increased by 12 per cent in the quarter, above the 9.6 per cent average analyst estimate. Adjusted earnings of 68 cents a share exceeded the estimated 65 cents.
“Our system alignment is stronger than ever and our networked organisation is allowing us to adapt as needed,” chief executive, James Quincey, said in a statement on Monday. “We are confident in our ability to deliver on our 2023 objectives.”
The beverage company has seen its performance bolstered in recent years as pandemic restrictions fade away. Now, consumers are proving willing to pay more for soft drinks at public venues such as restaurants, stadiums and concerts.
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Chief financial officer, John Murphy, said Coca-Cola’s commodity costs are a mixed bag of late. “We are seeing some of the inflationary forces declining, including metals,” he said in an interview. “Also lumber, copper, steel. In some areas that are important for our business, including sweeteners and juices, there are some meaningful increases.”
Murphy said the company has hedging strategies in place but “those hedges come off the back of even more favourable hedges in 2022. We are continuing to make sure that we have certainty of supply all around the world.”
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In North America, the average price across a mix of products grew by 11 per cent even as concentrate sales rose just 1 per cent and the key gauge of unit case volume gained 3 per cent. The Atlanta-based company cited “continued investments in the marketplace” along with strength in away-from-home channels.
Coca-Cola maintained its forecast of full-year organic revenue growth in a range of 7 per cent to 8 per cent. Wall Street’s average estimate for the measure stands at 7.8 per cent.
Revenue was $10.98 billion, compared with the $10.84 billion estimate.
The shares rose 1.7 per cent in early New York trading. The stock was up 0.7 per cent so far in 2023 through last week’s close, trailing the 7.7 per cent gain of the S&P 500 Index. – Bloomberg
