AP

Coke ups sales outlook after higher prices boost Q3 revenue

Oct 25, 2022, 4:21 AM | Updated: 8:12 am

Coca-Cola booked stronger-than-expected sales in the third quarter as it hiked prices around the world.

The beverage giant raised its revenue expectations for the second time this year. Coke said Tuesday that it now expects organic revenue growth of 14% to 15%, up from the 12% to 13% it predicted at the end of the second quarter.

Coke’s prices were up 7% over the same period last year. Coke Chairman and CEO James Quincey said consumers have been generally resilient in the face of food price inflation, which is at 40-year highs in some markets like the United Kingdom.

But Coke saw consumers start to trade down to smaller package sizes or private-label competitors to cut costs in the July-September period, particularly in Europe.

“The impact of inflation running ahead of wages is starting to come through,” Quincey said.

Still, Quincey said Coke is confident it can hang on to its customers. For more cost-conscious shoppers, Coke has introduced value packs with smaller-size bottles in the U.S., Japan and other markets. And Coke will continue to try to attract customers on the higher end of the market with offerings like its premium sleek cans.

“It will help us get through what is going to be a tighter situation over the next 6 to 12 months,” Quincey said.

Revenue rose 10% to $11.1 billion in the July-September period. That was ahead of the $10.5 billion Wall Street forecast, according to analysts polled by FactSet.

Volume rose 4% globally, but it saw a further 12% gain because of higher prices and the mix of products sold. That was offset by an 8% decline due to the impact of the strong dollar.

Shares rose 1% in morning trading.

Coke has raised prices throughout the year to account for higher ingredient and freight costs. Coke had locked in prices for some commodities in 2022, but will see those costs rise next year, Coke President and Chief Financial Officer John Murphy said.

“It’s still unclear as to how commodities will trend over the next six to 12 months,” Murphy said.

The company also spent more on marketing in all its major markets as stadiums, movie theaters and other venues welcomed back big crowds. China was one exception; pandemic lockdowns continued to impact sales there.

Sales of sparkling soft drinks rose 3%, led by strong demand for Coca-Cola Zero Sugar. Sports drinks and flavored waters gained 6%, while coffee sales rose 5% as Costa stores rebounded from pandemic-related closures last year. Juice and dairy sales were flat.

Coke’s net income rose 14% to $2.8 billion. Adjusted for one-time items, the Atlanta company earned 69 cents per share. That also beat analysts’ forecasts of a 64 cent profit.

Coke’s results mirrored rival PepsiCo, which also raised its earnings forecast this month after boosting prices by 17% in the third quarter.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

President Joe Biden speaks at a campaign rally Saturday, March 9, 2024, at Pullman Yards in Atlanta...

Associated Press

US shoots down ‘nearly all’ Iran-launched attack drones as Biden vows support for Israel’s defense

Joe Biden cut short a weekend stay at his beach house to meet with his national security team as Iran launched an attack against Israel.

1 day ago

Protesters in Phoenix shout as they join thousands marching around the Arizona state Capitol after ...

Associated Press

Abortion ruling supercharges Arizona to be an especially important swing state

A ruling this week instituting a near-total abortion ban supercharged Arizona's role, turning it into the most critical battleground.

2 days ago

Former President Donald Trump, center, appears in court for his arraignment, Tuesday, April 4, 2023...

Associated Press

Manhattan court searching for jurors to hear first-ever criminal case against a former president

Jury selection is set to start Monday in former President Donald Trump's hush money case — the first trial of the presumptive nominee.

2 days ago

Emergency personnel arrive on the scene after a  an 18-wheeler crashed into the Texas Department of...

Associated Press

1 dead and 13 injured in semitrailer crash at a Texas public safety office, with the driver jailed

A driver rammed an 18-wheeler though the front of a building where his renewal for a commercial driver’s license had been rejected.

2 days ago

Republican presidential candidate former President Donald Trump speaks at a Get Out The Vote rally ...

Associated Press

Trump pushes Arizona lawmakers to ‘remedy’ state abortion ruling that he says ‘went too far’

Donald Trump urged Arizona lawmakers on Friday to swiftly “remedy” the state court ruling allowing prosecutors to enforce an abortion ban.

2 days ago

Biden to require more gun dealers to run background checks....

Associated Press

Biden administration will require thousands more gun dealers to run background checks on buyers

New Biden rule to require thousands more firearms dealers across the United States will have to run background checks on buyers.

3 days ago

Sponsored Articles

...

Collins Comfort Masters

Here’s 1 way to ensure your family is drinking safe water

Water is maybe one of the most important resources in our lives, and especially if you have kids, you want them to have access to safe water.

...

Day & Night Air Conditioning, Heating and Plumbing

Day & Night is looking for the oldest AC in the Valley

Does your air conditioner make weird noises or a burning smell when it starts? If so, you may be due for an AC unit replacement.

...

Fiesta Bowl Foundation

The 51st annual Vrbo Fiesta Bowl Parade is excitingly upon us

The 51st annual Vrbo Fiesta Bowl Parade presented by Lerner & Rowe is upon us! The attraction honors Arizona and the history of the game.

Coke ups sales outlook after higher prices boost Q3 revenue