New York, United States – Coca-Cola reported higher quarterly profits on Monday, boosted by price increases as it tweaks its product portfolio due to inflation in leading markets.
Executives with the iconic soda brand described its home North American market as a “mixed bag,” with inflation and higher mortgage rates countering low unemployment.
While the company has benefited from the reopening of China’s economy, they added that activity is still below pre-pandemic levels.
And as higher consumer prices squeeze customers, Coca-Cola executives added in a call with analysts that some shoppers in Europe are instead seeking out discount options.
“There’s plenty of uncertainty out there in terms of the direction of inflation, both of the consumers reaction to it, and the input side,” said Chief Executive James Quincey.
Coca-Cola’s profits came in at $3.1 billion, up 12 percent from the year-ago period. This was helped by a boost from its revenues of $11 billion, up five percent.
Sales volumes grew three percent thanks to increases at sporting events, movie theaters and other away-from-home venues.
The results were also boosted by an 11 percent jump in prices and mix of goods.
While Coca-Cola’s results topped analyst expectations, it did not increase its full-year forecast.
Quincey described the results as strong, but said the decision to maintain the company’s outlook reflects “a degree of uncertainty that’s more elevated than pre-Covid.”
Coca-Cola’s strategy is to meet rising consumer demand in both the “value” and premium segments, he added in the conference call with analysts.
The lower-end option could include bulk purchases, while the premium slate includes the Jack Daniels & Coca-Cola pre-mixed canned cocktail, as well as Coca-Cola Creations — limited-edition beverages with colorful or special cans.
Executives said there has been cost moderation in freight, but that costs of sweeteners and juices are still high.
Shares of Coca-Cola rose 0.5 percent to $64.36 in morning trading.