Coca-Cola – Guidance Raised As Away-From-Home Drinks Flow

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Coca-Cola – Guidance Raised As Away-From-Home Drinks Flow
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Coca-Cola Co (NYSE:KO)’s second quarter organic revenue rose 37% to $10.1bn, reflecting a 26% increase in concentrate sales and an 11% increase due to pricing and product mix. This drove a 46% increase in underlying operating profits to $3.0bn.

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Q2 2021 hedge fund letters, conferences and more

The improved profit margin reflects an easing pandemic related restrictions and uncertainty, boosting more profitable sales channels and product formats. This was partially offset by greater marketing spend.

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Management upped guidance for full year organic revenue growth to between 12% and 14%

The shares were up 1.8% in pre-market trading.

Coca-Cola's Guidance Upgrade Is Encouraging

Laura Hoy, Equity Analyst at Hargreaves Lansdown:

“With restaurants back in action across most of the world, Coca-Cola saw a sizable revenue bump compared to last year. While some of the increase can be attributed to easier comparisons — last year’s away-from-home sales were practically non-existent — you can’t help but admire the fact that the group’s also marginally ahead of where it was at this time in 2019. That’s all the more impressive given pandemic headwinds still exist to some degree.

The reopening of Costa Coffee in the UK has been a breath of fresh air for Coke as well—the group took on a sizable amount of debt to acquire the coffee chain and get it’s foot in the door of the hot beverage market, only to see its revenue dry up a year later. With things getting back to normal, Coke can carry on with plans to develop the brand further.

The guidance upgrade is encouraging, but we’re taking the big numbers from this quarter’s update with a grain of salt. Coke is back to where it was before the pandemic.  Now we’ll be watching for whether or not the group can bubble to the top of the pack by holding on to at-home gains as away-from-home growth picks up speed.”


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