Coca-Cola is still delivering strong results globally, but its latest North American sales tell a more complicated story.
In its latest earnings report, the company posted net income of $3.33 billion for Q1, up 5% from the same period last year. Organic revenues also rose 6%, boosted by price increases and growing concentrate sales. But while markets like India, China, and Brazil pushed overall unit case volume up 2%, North America saw a 2% volume drop.
CEO James Quincey acknowledged the dip, citing a mix of challenges. “Volume was impacted by weakening consumer sentiment as the quarter progressed, particularly among Hispanic consumers,” he said during the April 29 earnings call. Weather issues and calendar shifts also played a role.
Adding to the complications, Coca-Cola had to publicly dispute viral social media videos that falsely claimed the company turned in Latino workers to immigration authorities. “Completely false,” Quincey said, but he admitted the videos hurt business.
Still, there were bright spots for the company in the report. Coke Zero Sugar sales jumped 14%, and Fairlife and Topo Chico also performed well.
Even with North America’s hiccups, the company’s global soft drink sales rose 2%, with particularly strong performance in Asia-Pacific markets. Sparkling flavors, juice, dairy, and plant-based beverages all posting modest gains, while coffee and sports drink volumes dipped slightly.
Analysts remain confident. Morgan Stanley bumped its Coca-Cola price target to $81 and called it their “top stock idea”, citing strong organic sales growth and resilience despite a tough consumer market. BofA also kept its buy rating, noting Coca-Cola’s ability to stay “on track to deliver” its full-year financial goals.
Looking ahead, Coca-Cola still expects organic revenue growth of 5% to 6% in 2025, despite updated guidance that slightly trims its expectations for currency headwinds and EPS growth. The company is also working to regain momentum with Hispanic consumers, with campaigns like “hecho en Mexico” to highlight job creation and affordability initiatives.
CFO John Murphy said the company feels prepared for trade and tariff challenges. “We have numerous levers to help manage the impact,” he noted.
In short: Coke’s global fizz is strong, but in North America, the company knows it has work to do.