Coca Cola's Q3 revenue exceeded expectations as significant price increases offset the impact of weak demand, raising full-year revenue guidance | Financial Report Insights

Thanks to a significant price increase that offset some of the impact of weak demand, Coca Cola's revenue and profit for the third quarter exceeded Wall Street's expectations.

On October 23, local time, before the U.S. stock market opened, Coca Cola released its third-quarter financial report for the three months ending on September 27.

1) Key Financial Data:

• Net revenue in the third quarter decreased by 1% year-on-year to $11.9 billion, slightly higher than the expected $11.6 billion; organic revenue (excluding acquisitions, asset divestitures, and currency effects) grew by 9% in the quarter;

• Adjusted earnings per share were $0.77, a 7% year-on-year decrease, exceeding the expected $0.74 per share;

• Net profit attributable to shareholders was $2.85 billion, an 8% year-on-year decrease;

• Operating profit margin was 21.2%, a decrease of 6.2 percentage points from the same period last year.

2) Performance Guidance:

• Coca Cola expects the year-on-year growth rate of organic revenue in 2024 to be around 10%, higher than the previously forecasted 9%-10%.

• Maintaining the forecast of 5%-6% growth in comparable earnings per share for this year.

"Our business continues to demonstrate resilience in a constantly changing external environment," said James Quincey, Chairman and CEO of Coca Cola, in the financial report announcement. "We are encouraged by our performance so far this year, as our system is able to manage short-term challenges while also focusing on long-term growth opportunities."

After the financial report was released, Coca Cola's pre-market decline continued to narrow, currently down by 0.9%. The company's stock price has risen by over 16% year-to-date.

Coca Cola will provide a complete 2025 performance guidance when announcing the fourth-quarter financial report. However, in the financial report statement released on Wednesday, the company expects exchange rates to impact next year's performance. Coca Cola anticipates low single-digit negative impact on comparable revenue next year and a moderate single-digit negative impact on earnings per share.

Third Quarter Volume Decline

Due to weak demand in international markets, Coca Cola's unit case volume in the third quarter decreased by 1% year-on-year.

Coca Cola's unit case volume in Europe, the Middle East, Africa, and the Asia-Pacific region all declined by 2%. Meanwhile, the unit case volume in the North American market remained relatively stable, with declines in water, sports, coffee, and tea products, but growth in soda, juice, dairy, plant-based beverages, and carbonated beverages By department, sales of carbonated water and soda such as Coca Cola and Sprite remained flat this quarter; while sales of juice, dairy products, and plant-based beverages decreased by 3%; sales of water, sports drinks, coffee, and tea decreased by 4%, with bottled water sales dropping by 6%.

Coca Cola stated that this quarter, the company's product prices increased by 10% (exceeding Wall Street's expected 6.51%), with around 4% of the increase coming from markets with severe inflation such as Argentina