Following another quarter of global volume growth, Coca-Cola (KO, Financial) delivered impressive Q2 results, surpassing both top- and bottom-line expectations. The company also modestly raised its FY24 adjusted EPS and organic revenue growth outlook. KO achieved a +2% volume growth in Q2, outperforming PepsiCo's (PEP, Financial) flat global beverage volumes for the sixth consecutive quarter.
- KO reported a moderate bottom-line beat with 3.3% year-over-year revenue growth to $12.4 billion. Excluding currency fluctuations and M&A impacts, organic revenues grew by 15.0%.
-
Inflationary pricing contributed to KO's organic revenue growth. Price/mix outside of Asia Pacific surged, particularly in North America (+11%), Latin America (+19%), and EMEA (+24%).
- Note: Price increases account for only half of the total price/mix growth.
- Despite inflation, KO's brand portfolio remained strong. Volumes in Europe were flat year-over-year, while North America saw a 1% decline, better than PEP's 3% decrease. Latin America volumes increased by 5%, and Asia Pacific volumes grew by 3%.
- Adjusted operating margins expanded by 120 basis points year-over-year to 32.8%, driven by KO's Global Ventures segment, which includes the Monster (MNST, Financial) partnership.
- KO raised its FY24 financial targets, aiming for adjusted EPS of $2.82-2.85 (up from $2.80-2.82) and organic revenue growth of +9-10% (up 1 point from prior forecast).
KO's Q2 results were particularly refreshing amid a challenging economic environment, especially compared to PEP's recent report. While non-carbonated beverages like juices and sports drinks performed well, the Coca-Cola trademark brand, including Zero Sugar, saw the most significant volume gains. This strength positions KO to maintain upward share momentum despite global economic uncertainties.
