(Bloomberg) — Coca-Cola Co.’s profit beat Wall Street expectations as shoppers paid higher prices for the company’s sodas, energy drinks and juices.
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The Atlanta-based maker of Sprite, Fanta and Minute Maid said that adjusted earnings per share for the quarter were 55 cents, above the average analyst estimate of 52 cents.
Coca-Cola has been largely unscathed even as budget-conscious shoppers have been pulling back on purchases of a wide range of items at the supermarket. The company had been raising prices for several quarters. The soda giant said that its price mix, or the prices it charges across a range of products, during the fourth quarter increased by 9%. Volume was up 2%.
“For 2025, we’re seeing a more normalized world when it comes to inflation,” Chief Financial Officer John Murphy said in an interview.
For the full-year, Coca-Cola expects adjusted earnings per share to grow 2% to 3%, and organic sales to gain 5% to 6%, below the analyst expectation of 7.1%.
The “guidance looks appropriate with some likely room for upside,” wrote Piper Sandler analyst Michael Lavery in a note to investors.
Stock Gains
Coca-Cola shares rose 3.7% at 9:35 a.m. on Tuesday. The stock gained about 8% over the past year through Monday’s close, while the S&P 500 Index is up 21% for the period.
The company’s growth comes as rival PepsiCo Inc. said last week that it missed analysts’ sales expectations and will focus on value to lure customers, though it doesn’t plan to reduce prices on all of its offerings.
Coca-Cola Chief Executive James Quincey told investors on an earnings call that some consumers around the world are feeling the strain of inflation and higher prices, while others continue to spend.
“Lower-income segments in the US and Europe are under disposable income pressure,” Quincey said. “The rest of the consumer base is actually still gaining in terms of disposable income and still saving.”
‘Total beverage’ company
With more consumers searching for healthier options, the company’s Coca-Cola Zero Sugar grew 13% in the quarter, even as the sparkling soft drink category gained just 2%. The result “reflects the demand for a broad range of portfolio choices,” Murphy said.
Coca-Cola also has a billion-dollar brand in Fairlife milk, which “continued to perform well throughout the year,” Murphy said. The final performance payment from its 2020 acquisition of Fairlife will be $6.1 billion and paid out this year. That’s double what the company expected to pay at the end of 2023.
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