(Bloomberg) — Coca-Cola Co.’s fourth-quarter sales exceeded Wall Street’s expectations in a sign that the beverage giant is benefiting from a return to normalcy despite the lingering pandemic.
Strong consumer demand in North America contributed to a 9% jump in organic revenue last quarter, which excludes the impact of items like currency and acquisitions, Coca-Cola said on Thursday. Analysts were looking for a 5% increase on average. Pricing and product mix were also better than expected.
Comparable earnings per share beat estimates for the ninth consecutive quarter, according to data compiled by Bloomberg, but Coca-Cola said last quarter marked the first time since the pandemic began in which away-from-home volume was ahead of 2019 levels. Strength in at-home channels also continued.
“Mobility has been the single most important variable for us to piggyback off,” Chief Financial Officer John Murphy said in an interview. “And as soon as people are able to move around, they will.”
Coca-Cola shares rose 0.8% to $61.52 at 9:42 a.m. in New York. Through Wednesday, the stock had risen 3.1% to start the year, outperforming a 3.8% decline in the S&P 500 index.
The company said Thursday that its size and targeted investments are helping it adapt to the “asynchronous recovery in many markets” as Covid-19 variants and subsequent virus-related restrictions ebb and flow around the world.
For the full year, Coca-Cola expects organic revenue growth to be in the 7% to 8% range. The average of four estimates compiled by Bloomberg called for 8.4% growth, but some analysts were looking for a forecast around 6.5%.
Investors have been watching whether Coca-Cola’s price increases and product mix can overcome inflationary pressures in commodities, transportation and labor. In fact, it was a “significant increase in marketing investments” that compressed operating margins last year, rather than supply-chain costs.
The owner of the Minute Maid, Simply, Dasani and Schweppes brands expects inflated commodity costs to continue this year, adding a mid-single-digit percentage to the adjusted cost of goods sold on a comparable basis. Murphy said the labor picture also remains uncertain, both in terms of costs and availability.
For 2022, the company expects profit excluding some items to increase 5% to 6% from $2.32 in 2021. Analysts had estimated $2.43, on average.
(Adds CFO comment in fourth and ninth paragraphs.)
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
