Coca-Cola’s sales rebounded faster than expected as the impact of the pandemic abated.
The Atlanta-based soft drink giant said its revenue jumped 42 percent to $10.1 billion in the April-June period. That was well ahead of the $9.3 billion in sales that Wall Street had forecast, according to analysts polled by FactSet. It was even slightly better than the same period in 2019.
It was a very different story than the second quarter of 2020, when Coke’s sales sank 28 percent. Coke Chairman and CEO James Quincey said the recovery remains uneven, but as vaccination rates increase, consumers are returning to their pre-pandemic routines.
“We’ve always believed that humans are social creatures and that once the restrictions come down and the panorama of the virus allows people the confidence to go out, they will go back out,” Quincey said Wednesday during a conference call with investors. “You can see very much beginning to happen in the second quarter.”
Even as people go out more, sales for home consumption remain elevated, Quincey said. The company is watching to see if habits that developed during the pandemic stick.
“That extra consumer interaction at home has created some new behaviors and engagement with brands that may well be enduring,” he said.
Increased advertising may have also boosted sales. Coke said it doubled its marketing spending in the second quarter compared to last year.
Case volumes grew 18 percent to a level that was even with 2019. Coke said some markets, like China, Brazil and Nigeria, are already running ahead of 2019 demand, while others, like India, continue to be under pressure due to the pandemic.
In North America, case volumes rose 17 percent as restaurants, movie theaters, stadiums and other venues reopened or dropped capacity restrictions. Coke has historically booked half its revenue from such businesses, which were crushed by the pandemic.
Demand for Powerade and other sports drinks was particularly strong, with case volumes up 35 percent from the same period last year. Coffee sales surged 78 percent as the company’s Costa retail stores reopened in the United Kingdom.
The company’s signature Coca-Cola brand also saw double-digit gains, led by Coke Zero Sugar. Quincey said the company’s new recipe for Coke Zero Sugar — which is designed to make it taste more like traditional Coke — is getting positive feedback in the 50 markets where it has already been launched. It will start hitting US store shelves this month.
Coke’s net income surged 48 percent to $2.6 billion. Adjusted for one-time items, the company earned 68 cents per share. Analysts had forecast earnings per share of 56 cents.
The company raised its full-year earnings forecast based on its results. It now expects organic revenue growth of 12 percent to 14 percent in 2021 — up from high single-digit growth — and earnings per share growth of 13 percent to 15 percent.
Coke’s shares were up 2 percent in morning trading.