Coca-Cola on Tuesday raised its full-year outlook for the third straight quarter, despite lackluster demand in its home market.
For the full year, Coke now expects comparable earnings per share to grow at least 11%, up from its prior forecast of an increase in the range of 9% to 10%. The beverage giant also anticipates that its organic revenue will climb at least 5%, a slight increase from its previous outlook of approximately 5% growth.
Shares of the company rose about 1% in premarket trading.
Here's what the company reported compared with what Wall Street analysts surveyed by LSEG were expecting:
- Earnings per share: 91 cents adjusted vs. 88 cents expected
- Revenue: $13.4 billion vs. $12.92 billion expected
Coke reported third-quarter net income attributable to shareholders of $4.01 billion, or 93 cents per share, up from $3.7 billion, or 86 cents per share, a year earlier.
Excluding transaction gains and other items, Coke earned 91 cents per share.
Net sales rose 7% to $13.4 billion. Coke's organic revenue, which strips out acquisitions, divestitures and foreign currency, also rose 7% in the quarter.
For the second straight quarter, the company's unit case volume increased 5%, helped by higher demand outside of North America.
Coke's home market reported flat volume. However, the company's North American business would have reported volume growth if not for the timing of the Fourth of July holiday and the months-long shortage of Topo Chico, a sparkling water brand Coke owns, CFO John Murphy told CNBC.
"The underlying momentum remains quite strong," he said. "Consumer sentiment is largely unchanged in the sense that, wherever you are on the income scale, you're looking for value, and I think our system here has done a good job interpreting that."
In recent quarters, Coke executives have said North American shoppers are under pressure, stretched thin by inflation and economic uncertainty. But the beverage giant has also said consumers are still buying its drinks, from premium brands like Fairlife to its namesake soda.
Globally, Coke's sparkling soft drinks business saw volume increase 5% during the quarter, lifted by growth of Coke, Coke Zero Sugar and Diet Coke.
Diet Coke is having a "resurgence," Murphy said. Gen Z consumers in the U.S. have nicknamed it a "fridge cigarette," while consumers in India threw Diet Coke parties as shortages tied to the U.S.-Israeli war with Iran have made the drink scarce.
"It's a brand that's almost reinventing itself with the next generation of consumers," he said.
Coke has also gained market share as rival PepsiCo sees its soda business struggle, according to Murphy. Still, some of Coke's soda brands, like Sprite, have "some work to do."
Coke's water, sports, coffee and tea division also saw volume climb by 5%. Increased demand for its water, which includes its premium Smartwater brand, fueled the growth. Demand for its tea and coffee was flat, while sports drinks declined.
The company's juice, value-added dairy and plant-based beverages business reported flat volume, despite growth in brands like Fairlife and Minute Maid.