Coca-Cola raised its annual organic sales and profit forecast on Tuesday, signalling strong demand for the company’s products.
The higher forecast indicated that higher prices did not deter customers.
The company, which is known for its soft drinks, energy drinks and juices, saw shares rise nearly 2% in premarket trading as it posted a surprise increase in second-quarter revenue.
Coca-Cola has been moving into new regions in Asia and Europe to keep its revenue growth intact.
It has offered budget friendly options such as 12-ounce slim cans, as well as reformulated versions of its drinks such as Coke Spiced and Georgia Coffee.
The company has also been catering to younger consumers by sponsoring music festivals and sporting events such as the Euro 2024 Football Championship and the Paris Olympics.
Coca-Cola’s selling, general and administrative expenses jumped nearly 7% to $3.55 billion during the quarter as it doubled down on a marketing campaign in the run-up to the Paris Olympics.
PepsiCo, on the other hand, missed second-quarter revenue estimates in July.
It is also launching new flavours of its snacking brands such as Lay’s and Doritos and offering products across different price tiers, as customers become more price-conscious.
‘Pretty Resilient’
Coca-Cola’s average selling price rose 9% in the second quarter, the company said, while unit case volumes increased by 2%.
However, volumes in North America fell by 1% as consumers grew cautious about spending and dining out.
Chief executive of Coca-Cola James Quincey said that consumer sentiment was “pretty resilient” in North America, although there were some signs of pressure in various segments across developed markets.
The company forecast fiscal growth between 9% and 10%, above its previously expected rise of 8% to 9%.
It expects annual adjusted profit to increase between 5% and 6%, compared to its prior forecast of a 4% to 5% rise.
Coca-Cola’s second-quarter net revenue rose 2.9% to $12.21 billion, beating London Stock Exchange Group estimates of $11.76 billion.
The adjusted profit came in at 84 cents per share, surpassing expectations of 81 cents.
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