Coca-Cola Co. KO -1.45% logged higher sales for the latest quarter as demand held up amid price increases, which helped the beverage giant offset surging input costs.
Despite the stronger-than-expected results, Coke stuck to its full-year earnings guidance, which includes expectations that commodity-cost increases will be a mid-single-digit percentage headwind to the cost of goods sold.
Coke’s organic revenue, which strips out currency swings as well as acquisitions or divestitures, rose 18% in the quarter ended April 1, driven by a 7% increase from price rises and mix of products sold.
The cost of goods sold rose 17% to $4.09 billion. Still, Coke’s operating income jumped 25% to $3.41 billion from a year earlier.
In recent quarters, Coke and rival PepsiCo Inc., which reports first-quarter results Tuesday, have faced surging prices for inputs, including the sugar in their drinks, the aluminum used to make their cans and the cost of moving products around the world.
At the same time, sales have remained strong as Coke’s business selling drinks and concentrates to stadiums, movie theaters and restaurants rebounds as more consumers grow comfortable going out as pandemic restrictions wane.
Coke also said its suspension of business in Russia as a result of the country’s invasion of Ukraine will hurt full-year adjusted earnings by 4 cents a share. The move will also have a 1% impact on unit case volume as well as a 1% to 2% impact on sales and operating income for the year.
Coke shares rose slightly in premarket trading after initially trading down.
Coke and PepsiCo have been revamping their product portfolios recently to keep up with changing consumer tastes. In November, Coke struck a $5.6 billion deal to take full control of BodyArmor, a sports-drink brand that has been growing sales faster than Coke’s soda business. Also last year, PepsiCo closed on the sale of its Tropicana juice business, which had been posting sales slower than other units.
Overall for the quarter, Coke posted a profit attributable to shareholders of $2.78 billion, compared with $2.25 billion a year earlier. Earnings were 64 cents a share, compared with 52 cents a share. Analysts surveyed by FactSet were expecting earnings of 58 cents a share.
Sales rose 16% to $10.49 billion. Analysts surveyed by FactSet were looking for $9.83 billion.
Write to Will Feuer at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
This post first appeared on wsj.com
