Coca-Cola boosts full-year outlook on higher prices

While consumers have begun to resist higher prices on some grocery items, Coca-Cola has continued to increase prices for its beverages.

Coca-Cola raised its full-year outlook as higher prices bolstered the soft-drink giant’s performance.

The Atlanta-based company now sees organic revenue growth, which strips out currency volatility and other items, in a range of 9% to 10% this year, above the previous projection in April for 8% to 9%.

The maker of Fanta sodas and Powerade sports drinks reported that organic revenue, which excludes the impact of currency shifts and acquisitions, rose 15% in the period, well above the 9.4% average estimate of analysts.

Revenue was $12.3bn (€11.3bn) in the period, above the average analyst estimate, while earnings per share of 84 cents surpassed expectations for 81 cents.

Comparable operating margin was 32.8%, compared with 31.6% a year earlier.

Fanta is one of the more popular beverage products under the Coca-Cola parent umbrella.

Resilient

While consumers have begun to resist higher prices on some grocery items, Coca-Cola has continued to increase prices for its beverages.

Averaged across regions, the company hiked prices across a mix of its products by 9%, more than the 8% price mix increase expected by analysts. Prices rose 11% in North America.

Globally, Coca-Cola’s total unit case volume was up 2%, matching estimates, though it declined 1% in North America.

The results contrast with those from Coca-Cola’s main rival, Pepsi, which earlier this month reported weaker-than-expected revenue growth as its snack-food business was hurt by increasingly budget-focused shoppers.

Pepsi said consumers continued to face a squeeze from rising prices and constrained wages.

Persistent inflation forced many shoppers to cut back on spending and switch to cheaper supermarket-owned brands. The US salty snacks category has been particularly lackluster as consumers focus more on nutrition and affordability.

Food giant Pepsi  raised average prices on its products by 5% for the quarter ended June 15, in line with the first quarter. However, overall organic volumes slipped 3%.

Coca-Cola and Pepsi have significant operations in the Republic of Ireland.

• Bloomberg with additional reporting by Reuters and the Irish Examiner.