The simultaneous rise in volume and price boosts Coca-Cola's Q3 performance beyond expectations, reaffirming the 2025 guidance
Coca Cola's third-quarter performance exceeded market expectations, with revenue increasing by 5% year-on-year to $12.46 billion, compared to analysts' expectations of $12.41 billion. Product prices rose by 6%, and sales volume increased by 1%. Operating profit was $3.982 billion, a year-on-year increase of 59%; net profit was $3.696 billion, a year-on-year increase of 30%. Coca Cola plans to launch new products to attract consumers, despite facing challenges from rising raw material costs
According to the Zhitong Finance APP, Coca-Cola (KO.US) reported third-quarter sales growth that exceeded market expectations, indicating that consumers are still actively purchasing the company's beverage products despite rising prices. The financial report shows that Coca-Cola's Q3 revenue increased by 5% year-on-year to $12.46 billion, better than the analysts' average expectation of $12.41 billion; organic revenue grew by 6%, also surpassing analysts' average expectations. Data shows that Coca-Cola's Q3 product prices increased by 6%, while overall sales volume grew by 1%.
The performance in terms of profit was also satisfactory. Q3 operating profit was $3.982 billion, a year-on-year increase of 59%; net profit attributable to shareholders was $3.696 billion, a year-on-year increase of 30%. The adjusted earnings per share were $0.82, better than the analysts' average expectation of $0.78.
This latest performance indicates that Coca-Cola is winning consumer favor with its continuously expanding beverage portfolio, which includes products such as sugar-free soda, sports drinks, and bottled water. As grocery retail competition intensifies and living costs rise, smaller-sized bottled and canned products are also driving the company's sales growth. Additionally, as the world's largest beverage company, Coca-Cola has benefited from price increases, especially for products like Fairlife milk and Topo Chico sparkling water.
In the North American market, growth in ready-to-drink tea, water, and energy drinks has offset the impact of another weak quarter for its flagship Coca-Cola soda. Coca-Cola plans to launch a Coca-Cola made with a sugar formula in the U.S. this fall in response to President Trump's "Make America Healthy Again" campaign, although some analysts have expressed concerns about higher raw material costs. Furthermore, the company plans to introduce 7.5-ounce mini cans in U.S. convenience stores, priced under $2 per can, to attract budget-conscious consumers and stimulate sales recovery.
Meanwhile, although Coca-Cola CEO James Quincey pointed out that the overall operating environment remains challenging, the company still maintains its sales and profit targets for the year. James Quincey stated, "We are confident that we can achieve our 2025 guidance targets while striving to meet our long-term goals." The company stated that it still expects to achieve a 5% to 6% growth in adjusted organic revenue by 2025, as well as a 3% increase in adjusted earnings per share compared to $2.88 in 2024.
As of the time of publication, Coca-Cola's stock rose over 2% in pre-market trading on Tuesday
