Coca-Cola Co revenue exceeds estimations after soft drink price hikes
Beverage giant Coca-Cola Co’s quarterly revenue has surpassed estimates, thanks to higher prices for soft drinks.
The soft drink maker also credited the easing of Covid restrictions as theatres and restaurants reopened, boosting sales.
It said adjusted revenue hit $9.47bn in the fourth quarter ended 31 December, from $8.60bn a year earlier. Analysts had expected revenue of $8.96bn, according to Refinitiv IBES data.
The group said it was anticipating full-year organic revenue growth of seven to eight per cent.
However, it warned that cost inflation was expected to continue in the mid-single digits, as businesses face soaring energy and labour costs.
Laura Hoy, equity analyst at Hargreaves Lansdown, said: “Coca-Cola’s bubbling back up to the top as easing coronavirus restrictions helped out-of-home sales recover once again in the fourth quarter. The result was annual case volumes ahead of pre-pandemic levels and a 16 per cent rise in organic revenue.”
Sport drink sales were boosted by the company’s acquisition of BODYARMOR, which Hoy said “should help strengthen the company’s position in the growing global health drinks market.”
She added: “The re-opening of Costa in the UK, and the return of footfall to town and city centres gave a big shot of caffeine to coffee sales as well. These are positive signs, considering the group stretched its balance sheet to make these purchases.”
While cost inflation was identified as a potential headwind, with earnings per share expected to grow, “this shouldn’t have too great an impact on margins,” Hoy added.
Separately, the soft drink titan PepsiCo has warned prices could be hiked further later this year should costs accelerate more than it anticipates.
Speaking to news agency Reuters, PepsiCo chief financial officer Hugh Johnston, said: “We control our supply chain basically all the way to the shelf. That puts us in a relatively better position, but I wouldn’t say we’re not going to have challenges. We’re not immune to that.”
The firm’s net revenue lifted 12.4 per cent to $25.25bn in the fourth quarter, surpassing estimates of $24.24 bn.