ATLANTA — Coca-Cola Co. reported strong sales in the second quarter due to higher prices and increased demand from restaurants, theme parks and other venues.
The company also raised its revenue expectations on Tuesday, saying it now expects full-year organic revenue growth of 12% to 13%. This is higher than previous forecasts of an increase of 7% to 8%.
Revenue rose 12% between April and June to $11.3 billion, the Atlanta-based company said. That was well ahead of Wall Street’s forecast of $10.56 billion, according to analysts polled by FactSet.
Coca-Cola said it raised prices worldwide to offset higher ingredient and transportation costs. Coca-Cola Chairman and CEO James Quincey said these higher prices are not yet affecting demand.
But Quincy said it’s hard to get an accurate value for consumers right now. There are early signs that lower-income shoppers, for example, are switching to cheaper food brands at grocery stores and convenience stores, but demand for travel and recreation __ at baseball stadiums and theme parks, for example __ is extremely high.
“This post-COVID realignment in consumer spending is superimposed on what feels like a squeeze on purchasing power,” Quincy said on a conference call with investors on Tuesday. “How it all plays out in the second half and next year is a lot of speculation, and I don’t think anyone will know until we actually get there.”
Coca-Cola Zero Sugar sales rose 12% in the quarter, driven by strong global demand. Coffee sales rose 15% as Coca-Cola launched its Costa coffee brand into new markets.
In North America, the number of cases increased by 2%. Coke benefited from higher prices as well as strong sales of premium drinks such as Fairlife milk and Smartwater.
Higher operating costs and increased marketing costs weighed on earnings. The Coca-Cola Company said its net income fell 28% to $1.9 billion in the quarter. This included losses related to suspension of business in Russia in connection with the invasion of Ukraine.
Excluding one-time items, Cox earned 70 cents per share in the quarter. That was also better than the 67 cents in earnings expected by Wall Street.
Coca-Cola shares rose 1% in morning trading.
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