Coca-Cola Reports Higher Quarterly Sales As Demand Remains Strong

Greater demand and price hikes helped balance rising input costs for the Coca-Cola Co. KO-2.39 percent beverage giant’s latest quarter sales growth.

When currency fluctuations and acquisitions and divestitures are excluded, organic revenue at Coca-Cola grew by 18% in the three months ending April 1, while unit case volume increased by 8%. Increased prices and an improved product mix contributed to the company’s first-quarter sales success.

The total cost of products sold increased by 17% to $4.09 billion in the year under review. Operating income at Coca-Cola rose 25 percent from last year’s figure to $3.41 billion in the third quarter. Coca-Cola maintained its full-year guidance, which includes higher material costs than last year’s, despite better financial results than analysts had expected.

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Coca-Cola CEO James Quincey warned analysts Monday that the recovery in 2022 will be “asynchronous” and that this year’s operating climate has been more difficult than projected.

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PepsiCo Inc., a competitor to Coca-Cola, has seen input costs rise in recent quarters, including the high-fructose corn syrup in its drinks, the aluminum required to create the cans, and the cost of transporting products around the globe.

But Coca-Cola’s stadium, movie theatre, and restaurant beverage sales are seeing an uptick as more people feel safe going out in the wake of the pandemic restrictions loosening.

Several analysts questioned Coke’s management on the earnings call about the company’s capacity to hike prices in markets throughout the world as inflation affects customers’ buying power. Continued price-changing initiatives will be contingent on consumer health and inflation, according to Mr. Quincey, as the year proceeds. Additionally, he added, the corporation has been enhancing its product marketing and package options.

Price rises are not something Mr. Quincey intends to accept simply because he has the option to do so. As a brand, we want to be able to recoup the costs and earn their trust over the long run.

Because Russia invades Ukraine, Coke will see its full-year adjusted earnings and case volumes drop by 4 cents a share. It had previously predicted a range of around $2.44 to $2.46 in adjusted per-share profit growth this year, reflecting a range of 5% to 6%.

The stock of Coca-Cola closed the day up more than 1% at $65.94 on Monday

During times of inflation, large corporations thrive. Companies of all sizes prosper when prices rise. During inflationary times, large corporations do exceptionally well. Companies, according to some, are being obliged to hike prices due to rising inflation, they say.

However, as Dion Rabouin of the Wall Street Journal notes, the opposite is true: Corporations are responsible for driving inflation, and research shows that this trend will continue for some time to come. Elizabeth Smelov provided the artwork for this image.

Coca-Cola and PepsiCo have lately restructured their product lineups to meet the demands of a rapidly evolving consumer market. In November, Coca-Cola agreed to pay $5.6 billion to acquire BodyArmor, a sports drink brand whose sales have been rising faster than those of Coke’s soda.

In the end, PepsiCo completed the sale of Tropicana juice, which had a lower growth rate than other segments of the company.

Coke reported a profit of $2.78 billion, or 64 cents a share, for the quarter, compared to $2.25 billion in the same period last year. According to FactSet, analysts expected the company to post 58 cents in earnings per share.

Sales grew by 16% to $10.49 billion, a record high. An estimated $9.83 billion was predicted by analysts polled by FactSet.

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