Coca-Cola reverses sales volume slide, sending revenue up 6% in the fourth quarter
Cans of Coca-Cola are on display at a grocery market in Uniontown, Pa, April 24, 2022. (AP Photo/Gene J. Puskar, File)
Coca-Cola said Tuesday it’s confident it can mitigate the Trump administration’s tariffs on aluminum by shifting its suppliers, relying more heavily on plastic bottles and other tools.
“It’s not insignificant, but it’s not going to radically change a multibillion-dollar U.S. business,” Coke Chairman and CEO James Quincey said in a conference call with investors. “It’s a cost. It’ll have to be managed. It would be better not to have it relative to the U.S. business, but we are going to manage our way through.”
President Donald Trump hiked his 10% tariff on aluminum imports to 25% on Monday.
The tariffs put a note of uncertainty into what was otherwise a better-than-expected fourth quarter earnings report from the Atlanta beverage giant.
Coca-Cola reported unit case volumes up 2% in the October-December period, reversing a 1% decline in the third quarter. Wall Street had expected Coke’s unit case volumes to be up less than 1%, according to analysts polled by FactSet.
Coke’s revenue rose 6% to $11.5 billion. That was also better than the $10.68 billion analysts were expecting.
Quincey said limited-time offerings like Sprite Winter Spiced Cranberry, Fanta Beetlejuice and Oreo-flavored Coke helped drive sales in the fourth quarter, and more innovation is coming this year. This week, Coca-Cola Orange Cream is going on sale in the U.S. and Canada.
Coke also saw improving sales in markets where it has been struggling, including China and the Middle East. On Monday, McDonald’s also noted improving sales in the Middle East in the fourth quarter.
Coca-Cola Zero Sugar saw strong growth globally in the fourth quarter, with case volumes up 13%. Water, coffee, tea and sports drink volumes were all up 2%, the company said Tuesday. Volumes for juice, dairy and plant-based drinks fell 1%.
Coke hiked prices 9% in the quarter, partly due to intense inflation in markets like Argentina. Prices also rose because Coke sold a higher mix of premium beverages like Fairlife milk and Topo Chico sparkling water.
Quincey said some lower-income consumers in the U.S. and Western Europe cut back on spending last year and may continue to pull back this year. But broadly, global demand was robust, he said.
“I think the the overall consumer environment is pretty stable in the sense that there’s good economic growth on a broad-based view around the world,” Quincey said.
Coke has also tried to make its drinks more affordable by offering smaller pack sizes and refillable bottles.
Coke’s net income rose 11% to $2.2 billion for the October-December period. Adjusted for one-time items, the company earned 55 cents per share. That also beat analysts’ forecasts of 52 cents.
For 2025, Coke said it expects organic revenue growth of 5% to 6%. The company’s organic revenue grew 12% last year.
Coke’s shares rose nearly 4% in early trading Tuesday.