Coca-Cola reported its fourth-quarter earnings before the bell on Tuesday, surpassing Wall Street's expectations amidst evolving consumer habits. The beverage giant posted adjusted earnings per share of 55 cents, outpacing the anticipated 52 cents. Furthermore, Coca-Cola's revenue reached $11.5 billion, exceeding the projected $10.68 billion, despite analysts predicting a 2.5% decline in quarterly sales.
Shares of Coca-Cola have appreciated by 7% over the past year, reflecting investor confidence in the company's resilience. With a market capitalization of approximately $275 billion, Coca-Cola remains a formidable player in the global beverage industry. The company plans to reveal its full 2025 outlook alongside its fourth-quarter earnings report, with anticipated challenges from currency exchange rate fluctuations potentially impacting future results.
While Coca-Cola continues to navigate a changing economic landscape, it faces headwinds in consumer spending patterns. McDonald's, its largest customer, reported a significant drop in U.S. same-store sales on Monday, marking the steepest decline since the Covid-19 pandemic. This trend illustrates how many shoppers have become more price-sensitive, affecting Coca-Cola's sales, particularly its away-from-home business.
The decline in consumer spending at restaurants has significantly impacted Coca-Cola's sales strategy. Consumers are increasingly opting to forgo soda purchases with meals or choosing smaller drink sizes, contributing to a downturn in the company's away-from-home business segment.
However, not all segments of Coca-Cola's portfolio are experiencing difficulties. Premium brands such as Fairlife and Topo Chico continue to demonstrate robust growth, highlighting consumer interest in higher-end beverage options despite broader price sensitivities.