Coca-Cola Co.’s second-quarter sales exceeded expectations and the company raised its full-year guidance, as decades-high inflation and higher prices found consumers still willing to pay more.
The soft-drink giant on Tuesday reported a 16% increase in organic revenue growth, which excludes the impact of items like currency and acquisitions. That beat the 8.2% average estimate of analysts surveyed by Bloomberg.
For the full year, the Atlanta-based company now sees organic revenue growth of 12% to 13%, up from its previous estimate of 7% to 8%. That’s despite an expected negative currency impact of 9%.
Earnings were 70 cents a share in the period, excluding some items. Analysts were looking for 67 cents, on average.
Chief Executive Officer James Quincey said the results reflected “the actions we’ve taken to execute for growth in the face of challenges in the operating and macroeconomic environment.” The company said it raised prices 12% on average across its products.
Coca-Cola continues to gain market share for its ready-to-drink nonalcoholic beverages. The maker of brands such as Sprite, Fanta and Minute Maid has benefited from consumers returning to much of their pre-pandemic behavior after Covid restrictions were lifted.
Coca-Cola’s chief rival, PepsiCo Inc., said two weeks ago that it also passed on an** average product price increase of 12% to consumers** during the second quarter, and it increased its full-year organic revenue growth forecast to 10% from 8%.
McDonald’s Corp. reported sales that topped estimates as consumers continue eating out despite higher prices.
The closely watched measure of same-store sales rose 9.7% in the second quarter compared with a year ago, the company said Tuesday. Analysts were looking for a gain of 7.5%, according to data compiled by Bloomberg. Sales at US stores open at least a year climbed 3.7%, while analysts projected a 3% increase. Adjusted profit also surpassed estimates, coming in at $2.55 a share, compared with an estimate of $2.46.
The Big Mac seller said US sales growth was helped by strategic price increases and value offerings. The company had said in April that some diners were trading down to less expensive menu options. The popularity of digital sales, including the mobile app and delivery, so far appears to be offsetting pressure consumers are facing from decades-high inflation.
The chain has largely been a winner during the pandemic due to its drive-thru lanes.** Digital sales** are also growing, topping** $6 billion in the quarter in the top six markets, accounting for almost a third of their total sales.**
Margins have been under pressure across the industry because of supply-chain problems and wage increases. McDonald’s said its** total restaurant margin rose 3% in the quarter, or 8% excluding currency translation.**
Leave a Reply