Coca-Cola reported higher-than-expected revenue in the fourth quarter as growth in Mexico, Germany and other markets offset lower demand in the U.S.
Revenue rose 7% to $10.8 billion for the October-December period, the Atlanta beverage giant said Tuesday. That topped Wall Street’s forecast of $10.7 billion, according to analysts polled by FactSet.
Coke’s revenue got a 10% boost from higher prices in 2023, but the company said that was partly due to hyperinflationary conditions in a handful of markets like Argentina. The company expects full-year organic revenue to grow at a more moderate pace of 6% to 7% this year, down from last year’s 12% growth.
“We anticipate hyperinflationary pricing will continue to play a role in 2024 but will moderate throughout the year,” Coke Chief Financial Officer John Murphy said in a conference call with investors.
Unit case volumes rose 2% in the quarter, led by sparkling soft drinks, juices and Coca-Cola Zero Sugar. Sports drinks, coffee and tea all saw lower demand.
In North America, unit case volumes declined 1% as growing sales of juice, dairy and Coca-Cola were offset by falling demand for water, sports drinks, coffee and tea. Coke said its North American prices rose 8% in both the fourth quarter and the full year.
Chairman and CEO James Quincey said price increases have clearly squeezed some consumers who are going out less often and buying more drinks for the home. But he said Coke continues to see strong buying power from other consumers, who are opting for higher-priced beverages like Fairlife milk, Core Power protein shakes and Simply juices.
“There’s clearly multiple things going on in the landscape in terms of categories and price points and we’ve been working to address both ends of those,” Quincey said.
Unit case volumes rose in Coke’s other global markets, although Coke said it did see some slowdown in demand due to the war in the Middle East. Several other big U.S. companies, including Starbucks and McDonald’s, have also reported disruptions in sales due to the war.
Net income fell 3% to $1.9 billion, or 46 cents per share. Without one-time items, including restructuring costs, the company earned 49 cents per share. That was in line with Wall Street’s forecast.
Coke shares were unchanged in early trading.
