Coca-Cola's Q3 revenue increased 5% year-on-year, exceeding expectations, but sales in key markets such as North America remain stagnant | Earnings Report Highlights

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The latest quarterly results released by The Coca-Cola Company show that, despite achieving above-expected revenue and profit growth through price increases and expanding its portfolio of healthy beverages, its global sales growth remains sluggish, with key markets such as North America stagnating. This suggests that high living costs continue to suppress consumer demand.

On Tuesday the 21st, Coca-Cola announced its Q3 financial report:

Q3 net revenue rose 5% to $12.5 billion, organic revenue up 6%;Operating profit margin reached 32.0% (last year 21.2%), mainly affected by the base effect of the 2024 fairlife goodwill impairment;Comparable EPS increased 6% to $0.82, dragged down by a 6 percentage point currency exchange impact.

This performance growth was mainly driven by a 6% increase in product price/mix, indicating that consumers are still willing to pay higher prices for Coca-Cola’s products. At the same time, the strong performance of healthier product categories such as sugar-free soda, sports drinks, and bottled water helped offset the sluggish demand for traditional sugary soft drinks. Boosted by the news, Coca-Cola's share price once rose 3.7% in pre-market trading.

However, behind the bright revenue figure, the unit case volume—a key indicator of real consumer demand—increased by only 1%, recording zero growth in two core markets: North America and Latin America. This indicates that even though the company is striving to maintain growth through pricing strategies and product innovation, overall consumer demand remains weak.

Price Increase Strategy Effective, but Sales Growth Sluggish

Financial data shows that Coca-Cola's third quarter performance exceeded market expectations. According to analyst estimates compiled by LSEG, the company’s adjusted EPS was 82 cents, higher than the expected 78 cents; adjusted revenue was $12.41 billion, slightly above the expected $12.39 billion.

The core driver of revenue growth was a successful pricing strategy. During the reporting period, the company’s price mix increased by 6%, higher than the analysts’ average estimates, indicating the company’s ability to pass higher costs onto consumers. However, unit case sales excluding price and exchange rate effects grew only 1%, reversing the decline from the previous quarter but still at a low level.

Notably, sales growth in the two key markets of North America and Latin America stagnated, registering zero growth. Company executives previously stated that low-income consumers in the U.S. are buying fewer of its products. Globally, sales growth was mainly driven by Central Asia, North Africa, Brazil, and the UK.

Diversified Health Product Portfolio Drives Growth

As consumers increasingly turn to healthier options, Coca-Cola’s diversified product portfolio has become another key pillar of its performance. Data show that consumer demand for traditional high-calorie soft drinks is decreasing, while demand for healthy beverages is rising.

Specifically, in the third quarter, global bottled water and sports drink sales each grew by 3%, while coffee and tea categories saw 2% growth. In contrast, sales of core sparkling soft drink categories remained flat. Meanwhile, sales of juice, value-added dairy products, and plant-based beverages shrank by 3%. Apart from category expansion, the trend toward small-pack bottled and canned products has also played a positive role in promoting sales amid intensified competition in supermarket channels and rising living costs.

Reaffirms Full-Year Guidance, Divests Bottling Business

Looking ahead, Coca-Cola reaffirmed its full-year guidance, expecting comparable EPS to increase by about 3%, with organic revenue growth of 5% to 6%. For the coming 2026, the company forecasts that currency fluctuations will have a slightly positive effect on its revenue and comparable earnings. The company will provide a complete outlook for next year in its fourth quarter financial report.

Along with the financial release, Coca-Cola’s strategic adjustments are also continuing. According to reports, one of the world’s largest Coca-Cola bottlers has agreed to acquire a controlling stake in another company, a move that will create a $2.6 billion bottling giant in Africa. This is the latest step in Coca-Cola’s divestment of heavy asset bottling businesses and its shift toward a light-asset operating model. This year, the company also sold its stake in its Indian bottling business.

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