USA – The Coca-Cola Company has reported a 1 percent decline in net revenue for the third quarter of 2024, amounting to US$11.9 billion.  

Despite the slight drop in revenue, the figure surpassed analysts’ expectations due to price increases that helped counterbalance weak global demand. 

The company’s operating margin for the quarter was 21.2 percent, down from 27.4 percent in the same period last year.  

This decline was primarily attributed to a US$919 million charge related to the remeasurement of contingent consideration from its 2020 acquisition of fairlife, LLC, as well as the impact of unfavorable currency exchange rates.  

On a comparable basis (non-GAAP), the operating margin rose to 30.7 percent from 29.7 percent in the prior year. 

Unit case volume, a key indicator of demand that excludes the effects of pricing and currency fluctuations, fell by 1 percent during the quarter. The drop reflects weakening demand in several international markets as inflation continues to affect consumer behavior.  

Chairman and CEO James Quincey noted a shift towards more “value-seeking behavior,” with some consumers opting to buy fewer Coke products or smaller-sized beverages at fast-food chains. 

In the Europe, Middle East, and Africa region, unit case volume dropped 2 percent. 

Although water, sports, coffee, and tea products saw some growth, declines in Trademark Coca-Cola, sparkling flavors, juice, dairy, and plant-based beverages offset these gains.  

Globally, sales of sparkling soft drinks like Sprite and Coca-Cola remained flat, while the juice, dairy, and plant-based beverage segment experienced a 3 percent decrease in volume.  

The water, sports, coffee, and tea segment saw a 4 percent drop, driven by a 6 percent decline in bottled water sales. 

Price/mix, which measures price changes and product shifts, increased by 9 percent. This was largely due to higher prices in markets facing strong inflation and pricing actions across the company’s operational units, although it was partially offset by unfavorable product mix. 

Despite the challenges, Coca-Cola remains optimistic about its performance in 2024. The company is now expecting organic revenue growth of 10 percent, at the high end of its prior guidance range of 9 to 10 percent.  

Comparable earnings per share are expected to rise by 5 to 6 percent, in line with earlier projections. 

Looking ahead, Quincey highlighted Coca-Cola’s focus on maintaining pricing strategies suited to different market segments.  

He stated, “We see us heading towards a more normalized level of pricing going into next year and landing in a more normal zone that tracks at similar rates to the CPI.” 

Quincey also emphasized the company’s commitment to investing in both affordability and premiumization options in North America. 

Sign up to receive our email newsletters with the latest news updates and insights from Africa and the World HERE