Coca-Cola reports revenue growth in third quarter despite ‘uneven’ global environment

Coca-Cola on Tuesday raised its outlook for this year’s financial results, reporting revenue growth during the third quarter despite what executives described as an “uneven” global operating environment.

But unit case volume was flat during the period in the Atlanta beverage giant’s home market, North America, as the company dealt with a calendar shift and some product availability issues.

“The global operating environment continues to evolve,” Coca-Cola CEO Henrique Braun said on a Tuesday earnings call.

“Geopolitical disruptions affect several parts of the world, cost pressures have accelerated and all of these has an impact on many consumers,” he said. “Yet, our confidence in the long-term opportunity remains unchanged.”

Coca-Cola said its global unit case volume grew 5% in the third quarter, led by growth in India, China, Mexico and Brazil. Some highlights included 5% unit case growth of its namesake soda and 16% growth of Coca-Cola Zero Sugar.

Coca-Cola’s net revenues jumped to $13.4 billion in the third quarter, up 7% from the same period last year.

Net income in the third quarter, which ended Oct. 2, rose 8% to $4 billion. But the company’s cost of goods sold increased 3% to nearly $5 billion.

“We had broad-based growth across the world,” John Murphy, Coca-Cola president and chief financial officer, told The Atlanta Journal-Constitution in an interview.

He attributed growth during the third quarter to strong execution with bottling partners, as well as strategic positioning of brands, packaging and prices to consumers.

Coca-Cola is focused on offering both affordable and premium beverage options to appeal to a wide swath of people, executives said on the earnings call.

“We’ve got tremendous insights as to what consumers, regardless of where they are in their income levels, are looking for,” Murphy told the AJC.

“Bringing affordable solutions for those for whom that’s important has been a key priority this year,” he said, as well as understanding “what value means” for each consumer group.

North America demand was flat

Coca-Cola reported unit case volume in North America was flat during the quarter, as growth in its namesake soda was offset by a decline in water, sports drinks, coffee and tea.

“I’m actually overall quite pleased with the North America performance,” Murphy told the AJC. He said the headline number looks tepid because this year the July 4 holiday weekend was included in the second quarter, not the third.

Murphy also referenced temporary supply constraints with Mexican water brand Topo Chico.

“We did not have Topo Chico in the market, so if you exclude those two factors, the North America number would have been positive,” he said.

Braun, on the earnings call, noted the growth of its namesake soda in North America during the quarter, along with other beverages, including milk brand Fairlife.

“Mr. Pibb has been another very good surprise,” Braun said, referring to the spicy cherry soda that Coca-Cola brought back last year.

North America is Coke’s largest operating unit, with $19.6 billion in net revenues last year, according to a July investor presentation.

Coca-Cola recently announced a new leader for the operating unit, Rob Gehring, the chief executive of Monster Energy’s Americas business.

“He is a veteran of our system and brings a wealth of knowledge and experience into the role,” Murphy told the AJC. “I have no doubt that under his leadership, we’ll continue to drive the North America business forward.”

Coca-Cola also recently struck a deal with chicken chain KFC to provide its beverages to thousands of U.S. restaurants, replacing rival PepsiCo. The transition is expected to begin in early 2027.

For the full year, Coca-Cola expects organic revenues to grow at least 5%, up from a prior forecast of about 5%. The company now expects adjusted earnings-per-share growth of at least 11%, up from 9% to 10%.