Coke's quarterly revenue and volumes fall but still beat expectations

Coca-Cola Co. said Wednesday its third-quarter revenue fell as sales volumes flattened or declined around the world.

But the company still beat Wall Street's forecasts and said it expects full-year organic revenue to rise 10%, which is at the high end of its previous guidance.

The Atlanta beverage giant said its revenue fell 1% to $11.9 billion. That beat Wall Street’s forecast of $11.6 billion, according to analysts polled by FactSet.

Coke hiked prices 10% in the July-September period. The company said that was partly due to hyperinflation in markets like Argentina. Coke has raised prices every quarter since the end of 2020.

But those higher prices are hurting demand. Coke said its unit case volumes fell 1% for the quarter. Demand for Coca-Cola Zero Sugar was up 11% but sales of juice, dairy, water, sports drinks and coffee were down.

“There’s clearly parts of the consumer landscape where there’s pressure on disposable income,” Coca-Cola Chairman and CEO James Quincey said during a conference call with investors.

Quincey said Coke is focused on making drinks more affordable by offering smaller pack sizes and, in some markets, refillable bottles. But prices are also rising due to growing sales of premium beverages like Fairlife milk and Topo Chico sparkling water.

Quincey said Coke will continue to see some inflation in labor, packaging and commodity costs next year, but he also expects smaller price increases and a return to volume growth. Some volume losses in the third quarter were likely temporary; for example, demand was down in India due to monsoons.

“We see us heading towards a more normalized level of pricing going into next year,” Quincey said. “We continue to be very choiceful about where we invest for affordability options and where we invest for premiumization options.”

Quincey said it doesn't appear that the E. coli outbreak at McDonald's announced late Tuesday will have a big impact on Coke's business, since it seems to be confined to a limited number of states. But he said McDonald's is a big partner and Coke will help with the situation in any way it can.

“Our hearts go out to the people who’ve been affected by the contamination,” Quincey said.

In North America, unit case volumes were flat in the third quarter. Growth for brands like Fairlife milk and trademark Coca-Cola was offset by lower sales of water and sports drinks. Volumes were also flat in Latin America. Sales volumes fell 2% in both Asia and in Coke's Europe, Middle East and Africa segment.

Coke shares fell 2% in early trading Wednesday.