Coca-Cola surpasses Q4 revenue forecast despite local market struggles
Date
2/13/2024 8:43:10 AM
(MENAFN) In its fourth-quarter earnings report, Coca-Cola revealed a stronger-than-anticipated revenue performance driven by robust growth in international markets such as Mexico and Germany, which helped counterbalance softer demand experienced within the United States. The Atlanta-based beverage giant disclosed a 7 percent increase in revenue, reaching USD10.8 billion for the period spanning from October to December, surpassing the Wall Street forecast of USD10.7 billion, as indicated by analysts surveyed by FactSet.
While the company celebrated this achievement, it cautioned that revenue growth is expected to moderate in the upcoming year. Coca-Cola anticipates a full-year organic revenue growth rate of 6 percent to 7 percent for the current year, a decline from the impressive 12 percent growth experienced in the previous year. Last year, Coca-Cola's revenue received a notable 10 percent boost from higher prices, but it foresees these price increases tapering off in line with inflationary pressures.
Unit case volumes witnessed a modest 2 percent increase during the quarter, led by strong performance in categories such as sparkling soft drinks, juices, and Coca-Cola Zero Sugar. However, there was a decline in demand observed for sports drinks, coffee, and tea products. Notably, within North America, unit case volumes experienced a slight decline of 1 percent, attributed to the offsetting effect of growing sales in categories like juice, dairy, and Coca-Cola products against declining demand for water, sports drinks, coffee, and tea. Coca-Cola indicated an 8 percent increase in prices during the quarter, a moderation from the double-digit price hikes implemented earlier in 2023. The company acknowledged that these higher prices are putting pressure on some consumers, prompting them to opt for store-brand alternatives.
Despite the challenges faced in the domestic market, unit case volumes demonstrated growth in Coca-Cola's other global markets, contributing positively to the overall revenue performance. However, net income experienced a 3 percent decline, amounting to USD1.9 billion, or 46 cents per share. Excluding one-time items such as restructuring costs, the company earned 49 cents per share, aligning with Wall Street's forecast. Following the release of the financial report, Coca-Cola shares experienced an almost 1 percent increase in premarket trading.
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