Coca-Cola exceeded Wall Street’s fourth-quarter revenue expectations on Tuesday, driven by higher product prices and strong demand for its juices, energy drinks, and sodas. Despite consistent price increases in recent quarters, consumers dining out and enjoying experiences like movies and sports continued to spend more on their favorite beverages and snacks.
In contrast to rival PepsiCo, which saw a sales decline for the first time in 14 quarters due to price hikes leading to a drop in volumes, Coca-Cola reported a 2% increase in unit case volumes and a 9% increase in average selling prices in the fourth quarter. However, the company anticipates slower growth in organic revenue, citing concerns that the benefits of price hikes may diminish over time.
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CEO James Quincey highlighted inflationary pressures in North America and Europe, particularly impacting consumer segments seeking value. Despite these challenges, Coca-Cola’s organic revenue forecast for fiscal 2024, estimated to grow between 6% and 7%, outperforms PepsiCo’s projection of a 4% rise.
Coca-Cola also anticipates annual adjusted profit growth between 4% and 5%, slightly below LSEG estimates of 4.5%. Despite this, the company’s net revenue rose by 7.4% to $10.95 billion, surpassing expectations, while adjusted profit of 49 cents aligned with estimates.
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Analysts note Coca-Cola’s superior performance compared to PepsiCo, attributing it to the company’s ability to implement and sustain price increases. As a result, Coca-Cola’s stock experienced a 1% increase in early trading.
