As unit case volume resumed rising and prices continued to rise, the beverage giant announced a surprise quarterly revenue boost on Tuesday, giving its shares their best day in almost two years.
The corporation dismissed worries about how the Trump administration’s tariff announcements may alter business planning and impact prices.
Midday trading saw a 3.3% increase in the stock (KO), which was sufficient to keep up with the DJIA gainers on the Dow Jones Industrial Average. Additionally, it was heading for the largest one-day gain since its 3.6% rally on Nov. 10, 2022, and the highest close since Oct. 28.
Chief Executive James Quincey responded to a question about whether aluminum tariffs would force the company to switch from aluminum cans to plastic packaging during the post-earnings discussion with analysts.
“I think we’re in danger of exaggerating the impact of the 25% increase in the aluminum price relative to the total system,” he stated. “It’s not insignificant, but it’s not going to radically change a multibillion-dollar U.S. business.”
According to Quincey, tariffs are a manageable issue even though packaging accounts for a minor portion of overall expenses.
“I don’t think we should … conclude that this is some huge swing factor in the U.S. business,” said Quincey.
Quincey responded that it’s difficult to establish firm plans when there is so much uncertainty when asked what adjustments the company would make in response to possible broader regulatory changes with the new Trump administration.
In essence, the business is “scenario planning” for a wide range of possible outcomes since “there are many things that could happen out there in the world.”
Quincey stated, “We will adjust as and when they come.”
He was particularly questioned if he has changed his approach in response to the rise in GLP-1 weight-loss medications. According to Quincey, there is evidence that GLP-1 use has caused consumers to consume “slightly less alcohol,” but thus far, this hasn’t had a significant impact on the nonalcoholic beverage sector as a whole.
Revenue unexpectedly increased, outpacing by a significant amount.
In the meantime, the business recorded net operating revenue for the fourth quarter ending December 31 of $11.54 billion, up 6.4% from $10.85 billion in the same period last year.
Comparable sales increased from $10.95 billion to $11.40 billion when nonrecurring items were excluded, although the FactSet average predicted a decrease to $10.68 billion. According to FactSet statistics, that was the largest margin for a top-line beat since the second quarter of 2022.
Volume of unit cases increased by 2%. Case volume had dropped 1% in the prior quarter, ending a six-quarter upward trend.
Growth in North America, Asia Pacific, and Latin America was the primary driver of the increase in the total number of cases, while decreases in juice, value-added dairy, and plant-based beverages were counterbalanced by gains in effervescent soft drinks, water, sports, coffee, and tea.
In the most recent quarter, price and mix increased by 9%, marking the eleventh consecutive quarter in which they have increased by at least 9%.
Value-added dairy, sparkling flavors, juice, plant-based beverages, and trademark Coca-Cola all saw a 1% increase in unit case volume in North America.
A 12% rise in price and mix was driven by “pricing actions in the marketplace.”
From $1.97 billion, or 46 cents per share, a year earlier, net income for the quarter ending December 31 increased to $2.2 billion, or 51 cents per share.
Adjusted earnings per share increased 12% to 55 cents, above the FactSet average of 52 cents, when nonrecurring events like asset impairments and tax issues are excluded. Bottom-line beats continued for the twenty-first consecutive quarter.
The business anticipates that full-year 2025 adjusted EPS would rise by 2% to 3% from 2024, whilst the current FactSet consensus of $2.95 suggests growth of 2.4%.
Following the results, Truist analyst Bill Chappell maintained his price objective of $80, which represents a 20% increase from current levels, and reaffirmed his buy recommendation on the stock.
“In short, [Coca-Cola’s stock] looks like one of the safest plays in what has become a minefield of challenges for the broader consumer-staples group, due to GLP-1, tariffs, FX and other issues,” Chappell stated in a client note.
Over the last three months, Coca-Cola’s stock has increased by 5.3%, the Dow has increased by 0.5%, and the Consumer Staples Select Sector SPDR ETF XLP has decreased by 0.5%.
