By Ananya Mariam Rajesh
(Reuters) – Coca-Cola Co on Tuesday raised its annual sales and profit forecasts for a second time this year, riding on resilient demand from consumers for its sodas, juices and energy drinks as well as higher prices.
Shares climbed 3% in early trading after the company also topped expectations for third-quarter results.
Rival PepsiCo also beat expectations and said it would hike prices next year as consumers continued to spend on products dubbed “affordable luxuries” at a time of elevated food prices and higher cost of living.
Coca-Cola’s average selling prices rose 9% in the third quarter, the company said, while overall unit case volumes increased 2%.
In an earnings call, CEO James Quincey said the company was monitoring the impact of weight-loss drugs and “there is still a lot of views out there as to what impact, if any, it will have.”
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Investors have tracked comments from packaged food makers this earnings season on the potential impact from the surging popularity of weight-loss drugs such as Wegovy and Ozempic.
“It certainly feels that it has been a bit of an overreaction…as a pure liquids company and as more of a global company (Coca-Cola) will probably see the impact later than anyone,” said Markus Hansen, a portfolio manager at Vontobel Quality Growth. Coca-Cola accounts for 3.98% of Vontobel’s Global Equity strategy as of June 30.
The maker of Sprite and Fanta now sees full-year organic revenue growth of 10% to 11%, compared with its prior forecast of an increase of 8% to 9%.
Coca-Cola forecast annual core earnings per share to rise between 7% and 8%, compared to a 5% to 6% increase earlier.
Third-quarter net revenue of $11.91 billion topped estimates of $11.44 billion, while adjusted earnings of 74 cents per share also beat expectations of 69 cents, according to LSEG data.
(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Sriraj Kalluvila)
