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Coca-Cola – Higher Prices Help Push Sales Ahead Of Expectations

By Anna Peel. Originally published at ValueWalk.

Ten most profitable companies in Georgia

Coca-Cola Co (NYSE:KO) reported Q1 sales of $10.5bn, ahead of market expectations, with organic growth of 18%. That was driven by improvements in pricing, a more favourable mix of products sold and an increase in concentrate sales.

Underlying operating profit, which ignores the effect of currency changes, grew 24% to $3.4bn. That reflected higher revenue offsetting increased marketing and acquisition costs.


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The group continues to expect full-year organic revenue growth of 7-8%, with cost inflation in the mid-single digits.

The shares were broadly flat in pre-market trading.

Coca-Cola’s Earnings

Matt Britzman, Equity Analyst at Hargreaves Lansdown:

“Coca-Cola’s fizzed ahead of revenue expectations to kick off a busy week of earnings. Volumes pretty much grew across the board as some weaker comparable periods were lapped from last year and key out-of-home channels were back up and running. Prices came along for the ride too, some of that’s down to intentional actions taken to offset rising costs but a more favorable mix of products sold geared toward the premium end of the scale also helped.

Given Coca-Cola stretched the balance sheet to buy BODYARMOR and Costa, it’s good to see sales in the sports drink and coffee segments leading the way. The reopening of Costa stores in the UK provided a relatively easy win given last year’s closures, but nonetheless progress is good to see.

Cost inflation’s expected to be a mid-single digit headwind into 2022 but there’s nothing concrete to suggest further price action is imminent, with management pointing to a ‘lets see how it goes’ approach as we move through the year. Other costs are set to rise as well though, with marketing spend ramping up to keep those all-important brands front and center with consumers – nonetheless earnings per share’s still expected to rise a healthy 8-10%.”


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