Coca-Cola raises annual revenue forecast on sustained soda demand
2022.07.26 15:53
FILE PHOTO: Coca-Cola crates are pictured in Abuja, Nigeria September 19, 2018. REUTERS/Afolabi Sotunde/File Photo
(Reuters) -Coca-Cola Co lifted its full-year revenue forecast on Tuesday, as demand for sugary sodas held up strong despite price increases to blunt the impact of higher costs for key inputs such as corn syrup and aluminum cans.
The blue-chip stock, which has gained 5% this year, rose about 1% in premarket trading. Packaged food makers have so far felt little impact of decades-high inflation, especially in the United States, as people prioritize spending on eating at home rather than at restaurants.
Rival PepsiCo (NASDAQ:PEP) Inc said last week it had not seen any slowdown in demand and added that there was room for prices to go further up.
Coca-Cola (NYSE:KO) said global sales volumes rose 8% in the second quarter, powered by growth in both developed and emerging markets, while average selling prices rose about 12%.
Net revenue rose 12% to $11.3 billion in the quarter ended July 1. Analysts on average had expected revenue of $10.55 billion, according to Refinitiv IBES data.
However, Coca-Cola’s comparable operating margin fell to 30.7% from 31.7%, squeezed by surging commodity and transportation costs.
The company forecast organic revenue to rise 12% to 13% in 2022, compared to prior expectation of 7% to 8% increase.
It expects full-year adjusted earnings per share, excluding the impact of a stronger dollar, to rise 14% to 15%, compared to prior estimates of 8% to 10% growth.
The company now sees a stronger dollar to be a 6% headwind to its revenue, compared to previous forecast of 2% to 3%.
