Coca-Cola on Tuesday said it sold more beverages and was able to increase prices at a greater clip than inflation, boosting profits during the first three months of the year.
Sales of traditional Coca-Cola products were up, as were milk and juices, though the company saw some softness in sports drinks, coffee and water.
The Atlanta-based beverage giant reported net income of $3.18 billion, up about 2% from the first quarter a year ago. The company said it saw 1% global growth in case volumes and a slight decline in sales of drink concentrates during the quarter.
Total revenue grew 3% to $11.3 billion compared to the first quarter 2023.
As a global company, Coca-Cola grapples with inflation and currency fluctuations that can vary widely. Coke said organic revenue, which takes out the effects of currency fluctuations and revenue through acquisitions, was up 11% in the quarter that ended in March.
“We’re encouraged by our start to 2024, delivering another quarter of volume, topline and earnings growth amidst a dynamic backdrop,” James Quincey, Coke chairman and CEO, said in a news release. “We believe our global system is primed for sustained success, thanks to the right strategies, clear alignment, a powerful portfolio and strong execution.”
Coke said in the first quarter it recorded a non-cash impairment charge of $760 million on its BODYARMOR brand of sports performance and hydration beverages. It also reported a charge of $765 million related to the fair market value of its 2020 acquisition of the remaining stake in milk brand Fairlife.
Coke said it saw growth in emerging markets like Brazil, the Philippines and Nigeria, but sales declined in China. Geopolitical pressures on sales remain, including the ongoing war in Ukraine and the Israel-Hamas war.
In North America, case volume was flat compared to first quarter a year ago.
“The U.S. consumer remains in good shape,” Quincey told investors. “There is some purchasing power compression in the lower-income echelons. I think it’s quite clear there’s some behavioral shift there looking for value.”
Coca-Cola has been investing in its brands and tinkering with new flavors and product lines, including launching a product line called Coca-Cola Spiced and expanding partnerships making canned and bottled alcoholic beverages.
The company has also been working on new ways to market its products, featuring tie-ups with brands such as Marvel and offering limited-edition soft drinks to appeal to younger consumers.
In February, the company launched sales of a limited-edition product called Coca-Cola Happy Tears Zero Sugar on TikTok. The drink it said celebrates “happy tears” and joyful moments and has a dash of salt and some peach flavoring. The company has also launched Zero Sugar versions of certain Minute Maid drinks.
Quincey also highlighted in a call with investors and analysts the company’s launch of fruit-forward soft drink K-Wave, a celebration of K-pop fans, including artificial intelligence-powered digital experiences, merchandise and online access to a June concert in Korea.
Coke told investors that it expects to produce 8% to 9% growth in organic revenue for 2024. But the company said its forecasted net revenues will see 4% to 5% growth, facing headwinds from currency devaluation in the face of inflation.
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