Coca-Cola Upgrades Full-Year Forecast After Stellar Quarter

A Strong Quarter That Caught Wall Street's Eye

Coca-Cola had a quarter that most companies would love to copy. The beverage giant reported quarterly revenue of $13.38 billion, which came in ahead of the $13.16 billion analysts had been expecting. Net income hit $4.43 billion, jumping from $3.81 billion a year earlier.

Revenue grew 7% for the quarter, and when you strip out things like acquisitions and currency moves, organic revenue was up 6%.

All of this happened while the national average gas price hit $4.56 per gallon in late May, a four-year high. But Coca-Cola's results suggest that even with higher gas bills, people still reached for a soda, a Powerade, or a coffee.

CEO Henrique Braun pointed to one big reason for the boost. "We had, during the World Cup, really a great opportunity for us to shine our brands," he told CNBC. "During the hydration breaks, Powerade was there."

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Which Drinks Drove the Growth

Total global unit case volume climbed 5% in the quarter.

The core Coca-Cola brand achieved 5% volume growth, marking its largest quarterly increase in 17 years when the pandemic period is not counted. Coca‑Cola Zero Sugar led the way with 16% growth. Diet Coke, known as Coca‑Cola Light in some markets, gained 7%. And Mr. Pibb - which got a relaunch with 30% more caffeine - surged 20%.

Powerade grew 8% in the quarter, helped by that World Cup exposure. The broader water, sports, coffee and tea segment rose 6%. All categories within that segment except coffee saw volume increase.

The sparkling soft drinks group reported 4% volume growth. The juice, value‑added dairy and plant‑based division grew 2%.

Coca‑Cola's North America business overall grew 3% in volume.

What It Means for Your Portfolio

The real news for investors is not just a good quarter - it is that Coca‑Cola raised its expectations for the rest of the year. Coca-Cola now projects comparable earnings per share will rise between 9% and 10%, an upgrade from its previous expectation of 8% to 9%. Additionally, the company increased its organic revenue growth forecast to roughly 5%, which is the top of the prior 4% to 5% band.

Braun acknowledged on the company's earnings call that "many consumers face inflationary pressures, geopolitical uncertainty and economic challenges. They are evaluating how they shop, what they value and what they want to put in their basket."

Coca‑Cola is also working on a turnaround for Costa Coffee, the chain it bought for $4.9 billion in 2019. Braun informed CNBC that the chain's outlets recorded growth in same-store sales during the quarter. According to reports, Coca-Cola attempted to offload Costa last year while James Quincey was still CEO, but abandoned the effort when bids came in too low.

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