Global (Commonwealth) _ Coca-Cola lifted its yearly sales and profit predictions on Tuesday, citing price increases and more advertising, particularly in overseas areas with robust demand for its sodas and juices. Coca-Cola shares surged about 2% after the firm reported an unexpected boost in second-quarter sales.
To appeal to diverse preferences, the firm has launched new drinks including Coke Spiced and Georgia Coffee. Additionally, it sponsors music festivals and athletic events like the Euro 2024 Football Championship and the Paris Olympics to attract younger customers.
With the Summer Olympics coming every four years, you expect a much greater impact on the market, and some of that is already factored into (Coca-Cola’s) projection, according to Christian Greiner, senior portfolio manager at F/m Investments, which holds shares in the firm.
During the quarter, the company’s selling, general, and administrative spending increased by nearly 7% to $3.55 billion as it ramped up marketing activities ahead of the Paris Olympics while simultaneously pushing budget-friendly choices such as 12-ounce thin cans abroad.
“Essentially, Coca-Cola is a marketing machine… According to Aarin Chiekrie, stock analyst at Hargreaves Lansdown, the group’s ongoing increase in marketing spend indicates that it isn’t letting up.
PepsiCo, which failed second-quarter revenue projections in July, is releasing new varieties of its snacking brands, such as Lay’s and Doritos, and selling goods across several pricing tiers to appeal to budget-conscious consumers.
Multi-can boxes of Coca-Cola and Diet Coke are pictured for sale in a highway services shop in Reading, Britain, on January 25, 2019. REUTERS/Peter Cziborra/File Photo Purchase Licensing Rights (opens new tab)
Coca-Cola’s average selling price jumped 9% in the second quarter, according to the Sprite producer, while unit case volumes increased 2%. However, volumes in the North American market declined by 1% as customers became more cautious about spending and dining out.
Coca-Cola CEO James Quincey stated that consumer mood remained “pretty resilient” in North America, despite signals of pressure in various areas throughout developed nations. The business expects organic revenues to increase by 9% to 10% in fiscal 2024, up from 8% to 9% before.
It anticipates annual adjusted earnings to climb between 5% and 6%, up from its previous prediction of 4% to 5%. Coca-Cola’s second-quarter net sales increased 2.9% to $12.31 billion, above LSEG’s expectations of $11.76 billion. Its adjusted earnings came in at 84 cents per share, above forecasts of 81 cents.
Coca-Cola, sometimes known as Coke, is a cola-flavored carbonated soft drink produced by the Coca-Cola Company. In 2013, Coke products were sold in over 200 countries, with daily consumption exceeding 1.8 billion servings. Coca-Cola is placed No. 94 on the 2024 Fortune 500 list of the biggest US firms by total revenue. According to Interbrand’s 2023 “best global brand” research, Coca-Cola ranked as the world’s sixth most valuable brand.
Coca-Cola was created in the late 19th century by John Stith Pemberton in Atlanta, Georgia. It was initially promoted as a temperance drink and a patent medicine. In 1888, Pemberton sold ownership rights to Asa Griggs Candler, a businessman whose marketing strategies helped Coca-Cola dominate the worldwide soft-drink industry in the 20th and 21st century.
The name relates to two of its basic ingredients: coca leaves and kola nuts, which contain caffeine. Coca-Cola’s present formula is a trade secret, however other formulations and experiments have been published. Coca-Cola has leveraged the secret around the recipe in its marketing, as only a few anonymous employees are aware of it. The drink attracted imitators and developed a new category of soft drinks called colas.
The Coca-Cola Company makes concentrate and sells it to licensed bottlers worldwide. The bottlers, who have exclusive area contracts with the corporation, make the completed product in cans and bottles by combining the concentrate with filtered water and sweeteners. A 12-US-fluid-ounce (350 ml) can includes 38 grams (1.3 oz) of sugar, which is often high-fructose corn syrup in North America. Coca-Cola is sold, distributed, and merchandised by bottlers globally to retail shops, restaurants, and vending machines. The Coca-Cola Company offers concentrate for soda fountains at major restaurants and foodservice wholesalers.
The Coca-Cola Company has sometimes produced new cola drinks under the Coke moniker. Coca-Cola comes in a variety of flavors, including Diet Coke, Caffeine-Free Coca-Cola, Zero Sugar, Cherry, Vanilla, and special varieties with lemon, lime, and coffee. Diet Coke is the most popular. Coca-Cola was known as “Coca-Cola Classic” from July 1985 to 2009 to distinguish it from “New Coke”.