Strong demand for Coca-Cola’s low-sugar Coke Zero, new orange-vanilla cola, and flavoured waters pushed the beverage maker’s quarterly sales and profit well above Wall Street estimates, sending its shares up almost 2%.
The world’s biggest beverage makers, Coca-Cola and PepsiCo, are responding to shifting consumer taste by tweaking ingredients and experimenting with new flavours that are focused more on health-conscious consumers.
These efforts have helped revive soft drink sales after a years-long slump. Its shares have now risen 13.5% in the past year.
Chief executive James Quincy said Coke Zero sales witnessed a double-digit percentage rise, while its new orange-vanilla Coke soda was also a hit.
Sales of the company’s carbonated drinks rose 1%, driven by strong performance of its Coke brand, while smaller, immediate consumption packages of its flavoured water and sports drinks drove a 6% sales increase in that business.
Mr Quincy is trying to make Coca-Cola a “total beverage company” by adding coffees, teas, smoothies, and flavoured waters to a portfolio that has traditionally offered aerated drinks.
It recently made a big bet on coffee with its $5.1bn (€4.5bn) acquisition of Costa Coffee and is preparing to launch ready-to-drink Costa products in stores soon.
Coke’s organic sales, which exclude the impact of currency swings and acquisitions, rose 6%, driven by price hikes and partly benefiting from bottlers stocking up more products due to Brexit uncertainty.
Revenue rose 5% to $8.02bn, and the company earned 48c per share on an adjusted basis.
Analysts had forecast earnings of 46c per share on revenue of $7.88bn, according to Refinitiv Ibes.
For the second quarter, the company projected a 6% boost in comparable revenue from acquisitions and divestitures, but continues to see an impact from a stronger dollar. It maintained its core sales growth forecast for the full year.
“We are impressed with Coca-Cola’s ability to deliver a strong topline, suggesting that its refranchising (and) portfolio transformation are paying off,” said Wells Fargo analyst Bonnie Herzog.