Coca-Cola on Wednesday reported a second-quarter revenue that surpassed 2019 levels, prompting the company to hike its full-year outlook.
Shares of the company rose more than 2% in morning trading.
Here’s what the company reported, compared with what Wall Street analysts surveyed by Refinitiv were expecting:
- Earnings per share: 68 cents adjusted vs. 56 cents expected
- Revenue: $10.13 billion vs. $9.32 billion expected
Coke reported fiscal second-quarter net income of $2.64 billion, or 61 cents per share. That’s up from $1.78 billion, or 41 cents per share, a year earlier.
Excluding items, the company earned 68 cents per share, beating the 56 cents per share expected by analysts surveyed by Refinitiv.
Net sales rose 42% to $10.13 billion, topping expectations of $9.32 billion. Organic revenue, which excludes the impact of acquisitions, divestitures and foreign currency, climbed 37%. A year ago, the company reported its biggest plunge in quarterly revenue in at least three decades as lockdowns led to cratering demand. The company said Wednesday that away-from-home channels, like restaurants and movie theaters, were rebounding in some markets, like China and Nigeria.
Unit case volume, which strips out the impact of currency and price changes, was flat compared with 2019 levels. All of its drink segments reported double-digit volume growth for the quarter. Coke named India as one of the markets that is still under pressure due to the health crisis.
“India and Southeast Asia were our only areas that did not see sequential volume acceleration on a two-year basis this quarter,” CEO James Quincey said on the conference call.
The company’s sparkling soft drinks unit, which includes its namesake soda, saw volume increase by 14% in the quarter. The nutrition, juice, dairy and plant-based beverage business reported volume growth of 25%, in part fueled by strong sales of Minute Maid and Fairlife milk in North America. The hydration, sports, coffee and tea segment also saw volume growth of 25%. The company’s Costa cafes in the United Kingdom reopened, spurring 78% volume growth for coffee alone.
Propelling Coke’s comeback is a significant increase in its marketing and advertising spend. CFO John Murphy said that the company doubled its marketing dollars during the second quarter compared with a year ago, when the beverage giant slashed that budget to preserve cash.
Like most food and beverage companies, Coke is seeing higher commodity prices. However, Murphy said that the company feels good about the rest of the year. The company plans to raise prices and use productivity levers to manage the volatility in the second half of 2021.
For the full year, Coke now expects to deliver organic revenue growth of 12% to 14%, up from its prior outlook of high-single digit growth. The company also raised its forecast for adjusted earnings per share growth to 13% to 15%, up from the prior range of high single digits to low double digits.
“Putting it all together, we realize there’s a range of possible outcomes when it comes to the pandemic in the second half of the year given the asynchronous recovery,” Quincey told analysts. “While we over-delivered relative to our expectations in the first half and have raised guidance for 2021, we are biased towards a growth mentality and will invest behind this momentum going into the rest of the year.”