Coca-Cola beats revenue estimates on the back of price hikes
Coca-Cola has posted fourth-quarter revenue ahead of Wall Street estimates as it saw a boost from higher prices and robust demand for its products.
Its shares traded mostly flat on Tuesday morning in New York.
Revenues jumped seven per cent to $10.8bn (£8.6bn) between last October and December. Analysts had expected a figure of $10.7bn.
The Atlanta-based beverage giant has hiked its prices in recent quarters to offset higher operating costs. Coca-Cola’s average selling prices rose nine per cent in the last three months of 2023 – more than expected.
Chief executive James Quincey said the price increases were mainly due to hyperinflation in some regions. Average prices shot up 24 per cent in Europe, the Middle East and Africa.
“In North America and Europe, while inflation is moderating, the cumulative impact of inflation is pressuring certain consumer segments who are seeking value,” Quincey added in a post-earnings call.
However, customers have remained loyal to the brand, with unit case volumes rising two percent.
In contrast, rival PepsiCo last week reported a drop in sales for the first time in 14 quarters after it too raised prices.
Coca-Cola’s 2024 organic revenue outlook beat expectations on Tuesday as it said a diverse product mix would boost earnings. The firm expects organic revenue growth of between six and seven per cent.
It added that global unit case volume rose two per cent last quarter, falling slightly below estimates. Latin America and Asia posted a strong performance, while volumes in North America ticked down one per cent.
“In the taste-test challenge of Coke versus Pepsi in their latest quarterly earnings results, Coke won,” said Dan Coatsworth, an analyst at AJ Bell.
“However, both sets of results pointed to a worrying factor which is falling sales volumes in a key market.”