Coca-Cola has successfully tested the elasticity of its consumer demand. The company has raised prices with little impact on its sales, which have also continued to increase in volume. Thanks to this, the company has taken advantage of the presentation of its third quarter results to raise its forecasts for the year as a whole. The company now expects an organic increase in income of between 10% and 11% for the year as a whole, two points more than the range it had managed until now.
In the third quarter of the year, the sales of the giant based in Atlanta (Georgia) were 11,953 million dollars (about 11,250 million euros at the current exchange rate), 8% more than in the same period last year. The company was able to contain production costs, which increased by only 2%, so gross margin grew by 12%, to $7,296 million. The operating result was affected by other costs and stood at 3,270 million, 6% more than last year. And the attributable consolidated net profit grew by 9%, to 3,087 million dollars, according to the accounts published this Tuesday by the company. In the accumulated of the first nine months of the year, sales increase by 6%, to 34,905 million and profit, by 16%, to 8,741 million.
Those are the accounting figures. In organic terms, which include currency impacts and incorporate other adjustments, the revenue of the company led by James Quincey grew at a rate of 11% in the third quarter, thanks above all to an average price increase of 9%, much higher to inflation, with which it has been able to gain market share. Consumers have been tightening their belts in the face of the inflationary environment, but Coca-Cola beverages are not among the victims of this adjustment to household budgets.
The rise in prices occurs mainly in the Latin American region (15%) and in Europe, the Middle East and Africa (19%), while it is more contained in North America (5%) and Asia Pacific (1 %). Analysts expected an average price increase of 6.2%, which has been widely exceeded.
“We had an overall strong quarter and are raising our full-year guidance for revenue and profits in light of our year-to-date results,” said James Quincey, president and CEO, in a statement. “Our leading portfolio of brands, together with an aligned and motivated system, allows us to win in the market today, while laying the foundation for the long term,” he added.
Sales in volume have grown by 2% in both developed markets (with Japan and Mexico as drivers) and emerging markets (where the main growth has been in India and the Philippines), also above forecasts. Carbonated soft drinks grew 2%, driven primarily by growth in Latin America and Asia-Pacific. The Coca-Cola brand grew by 2% and Coca-Cola Zero by 3%, while sales of other flavored soft drinks increased by 1% in volume.
In the juice, value-added dairy and vegetable beverage segment, volume growth was also 2%, driven mainly by the growth of Minute Maid, Pulpy in China, Santa Clara in Mexico and Fairlife in the United States.
Regarding the water, sports drinks, coffee and tea business, growth was 1%. Coffee stood out with a volume increase of 6%, mainly driven by the good results of Costa coffee in the United Kingdom and China. Sports drinks also stood out, growing 3%, driven mainly by Powerade in Latin America and Europe, the Middle East and Africa. In contrast, tea sales decreased 1%, as growth in Asia-Pacific was more than offset by declines in Latin America and the Doğadan brand in Turkey.
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