Coca-Cola on Tuesday raised its forecasts for annual sales and profit after a stronger than expected second quarter. 2024 organic sells are expected to grow between 9% and 10% instead of the previous 8% to 9% with annual adjusted profit increasing to 5%-6% growth.
Q2 revenue beat estimates of $11.76 billion coming in at $12.31 billion and adj earnings per share are 84 cents which is 3 cents higher than analysts’ forecasts. Coca-Cola is also expecting to benefit from price hikes and an international advertising campaign. Recently Coca-Cola has released new variations of its drinks such as Coke Spiced and Georgia Coffee to expand its offering. Along with this Coca-Cola has been sponsoring major sporting events like the Euro 2024 Football Championship and the upcoming Paris Olympics. Due to this increase in marketing Coca-Cola’s selling, general, and administrative expenses grew by 7% to $3.55 billion during quarter 2. With regards to Coca-Cola’s increasing expenses, Aarin Chiekrie an equity analyst at Hargreaves Lansdown said “Fundamentally, Coca-Cola is a marketing machine … A continued rise in marketing spend suggest the group isn’t taking its foot off the pedal.”
Taking a deeper look into the second quarter, Coca-Cola’s average selling price increased by 9% and unit case volumes increased by 2%. Sales in North America fell by 1% as consumers became more careful with where their spent money. In response to this James Quincy, the CEO said that consumer sentiment was resilient in North America despite some signs of pressure in various areas.
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