Coca-Cola results exceed expectations with higher prices and stable demand

0

CocaCo-Cola beat quarterly revenue and profit forecasts on Monday, helped by higher prices and a rebound in demand for its sodas in theaters and restaurants.

Consumer goods companies raised prices in the face of soaring costs for ingredients like coffee and sugar, as well as increased labor and transportation expenses. But demand has been resilient as consumers emerging from pandemic curbs are spending more.

Analysts and companies have warned demand could slow as war in Ukraine and Indonesia’s ban on palm oil exports drive global food prices higher.

The company said suspending its operations in Russia would impact its annual profit by 4 cents per share and its annual net revenue by about 1% to 2%. However, he left his forecast for comparable annual growth in earnings per share unchanged at 5% to 6%.

Read more: Coca-Cola and PepsiCo suspend beverage sales in Russia, L’Oréal closes stores

Net revenue increased 16% to $10.5 billion in the first quarter. Analysts had expected revenue of $9.83 billion, according to Refinitiv data.

Net income attributable to CocaCola shareholders rose 24% to $2.78 billion, or 64 cents per share, in the three months ended April 1, 2022.

Analysts had expected earnings of 58 cents per share.

Refillable glass bottles

The cola giant too warned that consumer demand could slow as runaway inflation shows no signs of abating and said it was focusing on more affordable, refillable glass bottles in markets facing the biggest price increases.

To prepare for the expected decline in consumer purchasing power, CocaCola said it was expanding the distribution of cheaper returnable or refillable glass bottles in emerging markets in Latin America and Africa.

She is also experimenting with returnable bottles in the southwestern United States.

So far, demand for sodas and other packaged foods has remained strong despite price increases driven by rising costs for everything from aluminum cans and sugar to labor and transportation.

Cocacola cChief executive James Quincey said the resilience in demand won’t last forever.

“I don’t expect the (price) elasticities to be inelastic in the future. I expect the elasticity to increase at some point in the future. Will it be next quarter Or will it be next year? I can’t give you the answer to that question,” Quincey said on a call with analysts.

Earlier this month, Procter & Gamble said it expected demand for its feminine, home and oral care products in the United States to decline as summer price hikes trickle down. on store shelves.

News by Reuters, edited by ESM- your source for the latest A-Brands news. Click subscribe to register ESM: European Supermarket Magazine.

Share.

About Author

Comments are closed.