Earnings report sharing/Is the happy drink Coca-Cola still happy?? The stock price rose slightly!

$Coca Cola(KO.US) announced its Q2 earnings report before the market opened on July 23. The data showed revenue above expectations, and Coca-Cola raised its full-year organic revenue outlook. The stock price rose 1% in pre-market trading! So what other data is worth noting? Let's take a look together～

Q2, 2024

Revenue increased 3.3% year-over-year to $12.36 billion, higher than the market expectation of $11.76 billion;

From the beverage division sales:

Sales of the flagship product Coca-Cola increased 2% year-over-year;

Sales of Coke Zero increased 6% year-over-year;

Juice, dairy, and plant-based beverages increased 2% year-over-year;

Water, sports drinks, coffee, and tea were roughly flat, with coffee performing the worst, down 4% year-over-year;

EPS increased 7.7% year-over-year to $0.84, higher than market expectations;

Operating profit margin was 21.3%, higher than 20.1% in the same period last year;

Non-GAAP operating profit increased slightly from 31.6% last year to 32.8%;

Net profit was $2.411 billion, lower than $2.547 billion in the same period last year;

Global unit case volume increased 2% year-over-year, in line with market expectations;

Future Expectations

Raised 2024 adjusted EPS growth to 5-6%, and organic revenue growth expectations were also raised to 9-10%;

Summary

This quarter's earnings report delivered solid results, with revenue higher than expected at $12.36 billion. Although Coca-Cola has continuously raised prices over the past year due to inflation, consumers are still willing to accept the price increases. Meanwhile, organic revenue, driven by volume and price, grew 15%, higher than the market expectation of 9.4%;

From a pricing perspective, Coca-Cola's global prices increased 9% year-over-year, higher than the market expectation of 8%. Of this, 5% was due to high inflation in certain markets, while the rest was due to price adjustments. By region, prices in Europe, Africa, and the Middle East increased 24% year-over-year, the highest among all markets, followed by the high-inflation Argentine market. The largest market, North America, saw an 11% increase, while the Asia-Pacific market was the only one to see a 3% price decrease;

In terms of sales volume, this quarter's growth was primarily driven by a 5% year-over-year increase in Latin America, a 3% increase in the Asia-Pacific region, and a 4% increase in emerging markets. North America was the only region to see a decline, at -1%;

Overall, Coca-Cola's performance reflects the momentum from the beginning of the year and its continuous efforts to increase market share in the non-alcoholic beverage market. Market share has increased in most regions, with only Latin America seeing a decline. The overall performance is stable, with growth in operating profit. Regarding the decline in unit case volume in North America, Coca-Cola stated that it is collaborating with companies like McDonald's to promote value meals to boost sales;

On inflation, Coca-Cola noted that consumer sentiment remains strong, except in high-inflation markets. Inflation is generally decreasing and normalizing, and global pricing strategies are expected to return to normal levels for the remainder of 2024. Additionally, PepsiCo mentioned in its earnings report last week that high borrowing costs and declining personal savings rates are reducing consumer budgets, making them more price-sensitive. This trend is not limited to low-income groups but is also affecting high-income groups. PepsiCo plans to address this through promotions and adjusted marketing strategies. Overall, while U.S. inflation may be declining, consumers are increasingly dissatisfied and sensitive to price hikes, leading to reduced spending. Many retail, dining, and consumer goods companies are seeing sales declines and are using promotions, events, and value meals to attract customers;

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