Coca-Cola lifts annual profit forecast on steady sodas demand

A stock image of Coca-Cola bottles. (Unsplash/Alessandro D’Antonio)

April 28 (Reuters) - Coca-Cola raised its annual adjusted profit forecast on Tuesday, betting on steady demand for its pricier beverages and sodas in key markets such as the United States.

The beverages giant’s shares rose about two per cent in premarket trading as it topped quarterly revenue and profit expectations and stuck to its organic revenue growth target for 2026.

“We’ve had a strong start to the year ... Yet there’s so much more we can do as we navigate a dynamic environment,” said CEO Henrique Braun, who took charge at the end of March.

Coca-Cola has invested heavily in brands such as Fairlife milk and bottled teas as well as zero sugar and low sugar drinks as consumers move toward healthier alternatives.

It has also offered smaller pack sizes to more cost-conscious households as higher cost of living force consumers to temper spending.

Volumes rose across all its four geographical segments, while the overall volume growth of three per cent outpaced price of two per cent.

Meanwhile, the surge in energy prices due to the Middle East conflict has led to higher input costs for consumer goods companies, even though they have little room to raise prices and protect margins as consumers turn frugal due to costlier gas and food.

Coca-Cola operates through local bottlers and distributors to sell its soda concentrates, but it is still directly exposed to higher packaging costs of plastic as well as aluminum for some finished products such as Powerade energy drinks.

Earlier this month, rival PepsiCo topped quarterly expectations, helped by resilient demand for diet sodas as well as its move to cut prices on some key snack brands such as Lay’s. The company warned of a more volatile macroeconomic environment due to geopolitical strife.

The company expects annual comparable earnings per share to grow eight per cent to nine per cent, compared with a prior view of seven per cent to eight per cent rise.

Coca-Cola reported first-quarter revenue of US$12.47 billion, compared with estimates of US$12.24 billion, according to data compiled by LSEG.

On an adjusted basis, the Atlanta-based company earned 86 cents per share, exceeding estimates of 81 cents.

Reporting by Juveria Tabassum in Bengaluru and Alexander Marrow in London; Editing by Arun Koyyur