Coca-Cola’s fiscal third-quarter earnings and sales exceeded Wall Street analysts’ estimates on Wednesday thanks to an improvement in its away-from-home channels such as restaurants, cafes, and cinemas, prompting it to increase its annual outlook again.
In a press release, Chairman and CEO James Quincey said that Coca-Cola’s strategic transformation had allowed it to emerge from the pandemic as a stronger company.
The multinational beverage corporation saw its net income for the three-month period ending Oct. 1 grow to $2.5 billion, or 57 cents per share, compared with $1.7 billion, or 40 cents a share, a year prior, CNBC reported. The company’s comparable earnings per share (Non-GAAP) grew 18 percent to 65 cents per share, topping estimates for 58 cents.
Meanwhile, its net revenues grew 16 percent to $10.0 billion from $8.65 billion a year earlier, beating expectations for $9.75 billion. Organic revenue, which does not include expenses such as those relating to acquisitions, restructuring, and divestitures, grew 14 percent.
As a result, the company is now raising its annual outlook to reflect another quarter of “momentum.”
Coco-Cola says it now expects to deliver full-year organic revenue growth of 13 percent to 14 percent, up from the 12 to 14 percent previous estimate.
It also expects to deliver comparable earnings per share (non-GAAP) growth of 15 percent to 17 percent versus its previous range of up 13 percent to 15 percent.
The company said an increase in sales in the third quarter was driven by an improved performance in away-from-home channels along with continued strength in at-home channels.
“Our strategic transformation is enabling us to effectively navigate a dynamic environment and emerge stronger from the pandemic,” said Quincey. “We are updating our full-year guidance to reflect another quarter of momentum in the business.”
“While the recovery continues to be asynchronous around the world, we are investing for growth to drive long-term value for the system. Our strong system alignment and networked organization are helping us unlock enormous potential in our brands and across our markets,” Quincey added.
The beverage company acknowledged the current supply chain crisis but is still optimistic, noting that “while recovery continues to look different across markets and the supply chain environment remains dynamic, the company is progressing on its strategic transformation and is leveraging the networked organization to drive growth for the system.”
President Joe Biden has attempted to alleviate supply shortages and disruptions before Christmas, but experts say that the process will take far longer.
Earlier this month, the White House released a statement saying it received confirmation from UPS, FedEx, Walmart, and other companies, as well as the Port of Los Angeles, to increase the number of shifts to deal with a backlog of container ships, labor shortages, and warehousing issues.
Biden also threatened on Oct. 13 to “call out” private companies who fail to assist his administration and step up to address global supply-chain bottlenecks.
Goldman Sachs economist Ronnie Walker, has warned that the situation does not look set to improve in the immediate future as officials struggle to find a solution to the issue.
“Backlogs and elevated shipping costs are likely to persist at least through the middle of next year because no immediate solution for the underlying supply–demand imbalance at U.S. ports is available,” Walker said in a note to clients earlier this week.
As for 2022, Coco-Cola says it is “confident in the underlying momentum in the business,” as well as its innovative agenda and more effective approach to marketing, among other things but notes it expects elevated commodity inflation.
The company will release its full-year 2022 guidance when it reports fourth-quarter earnings.