Coca-Cola raised its full-year revenue forecast on Tuesday, as demand for soft drinks remained strong despite price increases to mitigate the impact of higher costs for essential inputs such as corn syrup. and aluminum cans.
The beverage maker has now said organic revenue, which excludes the impact of a stronger dollar, is expected to increase by 12% to 13% in 2022, compared with a previous expectation of a 7% to 8% increase.
“Coca-Cola’s results are a testament to the value of its brand because consumers are unwilling to switch to other colas despite rising prices,” said Garrett Nelson, an analyst at CFRA.
In the quarter ended July 1, net revenue increased 12% to $11.3 billion, beating analysts’ expectations of $10.55 billion, according to data from Refinitiv IBES.
The company also said that global sales volumes rose 8% in the second quarter, driven by growth in developed and emerging markets, while average sales prices rose about 12%.
The results, however, showed the impact of higher expenses, with the comparable operating margin falling from 31.7% to 30.7%.
Coca-Cola Chief Executive James Quincey said the company will further raise prices in markets where costs are rising and intends to pass most of them on to consumers before a possible recession.
The company was bracing for an economic downturn by investing in smaller, cheaper packaging, Quincey said, but added that the company’s products are historically among the last to see a slowdown in demand during recessions.
Source: CNN Brasil
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