Coca Cola hopes to hit the higher end of its organic sales forecast for 2024 on growing demand for its fizzy drink and juice products in the US.
It was thanks in part to this rising demand that the company posted a surprise rise in third-quarter sales on Wednesday.
The beverage company has been experimenting with pack sizes to drive growth, offering 12-ounce slim cans to attract customers with tight budgets in the US.
It also launched reformulated versions of its Sprite and Fanta in India and South Korea.
Profit
Revenue in North America rose 12% and the company expects annual organic sales to grow about 10% compared to a prior view of a 9% to 10% rise.
Its average selling price rose 10% while unit case volumes fell 1%.
Shares of the company, however, slipped 0.5% in premarket trading as Coca Cola reiterated its growth forecast for annual adjusted profit of 5% to 6% despite price hikes.
Christian Greiner, a senior portfolio manager at F/m Investments – which owns shares in Coca Cola – said, “The weakness of the stock a little bit here is that they’re leading more on price… (while) guidance is just being maintained here.”
Griener added that investors had expected growth in volumes, but price-conscious customers in the Middle East and China impacted this.
Earlier this month, rival PepsiCo chief executive Ramon Laguarta said price increases said price increases and borrowing costs were hurting consumer budgets.
The Frito-Lays chip maker cut its annual sales forecast after posting quarterly revenue below expectations.
Coca Cola’s net revenue rose 0.3% to $11.95 billion.
However, analysts had expected a 2.62% drop to $11.60 billion, according to data compiled by the London Stock Exchange Group.
The company’s adjusted profit came in at 77 cents per share, compared with estimates of 74 cents.
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