By
Chimamanda U. Martha
October 24th, 2023
Although Coca-Cola saw its Q4 2022 revenue rise, the company suffered a decline in demand for other products from higher prices.
The Coca-Cola Company (NYSE: KO) has posted its Q4 2022 earnings report, which shows a surge in revenue from higher prices. The beverage giant’s revenue haul for the fourth quarter of last year came in at $10.13 billion, surpassing the consensus estimate of $10.02 billion. However, Coca-Cola’s earnings per share (EPS) for the period ended December 31st were in line, with 45 cents adjusted versus 45 cents expected.
Coca-Cola also reported a Q4 net income of $2.03 billion, or 47 cents per share, attributable to the company. This latest quarterly haul represents a decline from the 2.41 billion or 56 cents per share the company made a year earlier.
Higher Drink Prices Impact Demand for Other Coca-Cola Beverage Products in Q4 2022 Outing
Although Coca-Cola’s shares rose 1% in premarket trading following its Q4 results, higher prices on its drinks impacted demand for other products. According to the Atlanta-based corporation, demand for Coke products such as Simply Orange Juice and Fairlife Milk dipped in the fourth quarter. Furthermore, the company’s sparkling soft drinks and other beverage segments, including water, sports, and coffee, remained flat for the quarter. However, Coke Zero Sugar’s volume saw a 9% increase, while the company’s coffee business volume increased by 11%. The volume increase in the coffee business resulted from Coca-Cola expanding the Costa brand it acquired from Whitbread PLC in 2019.
In addition to its unit case volume dropping 1% in the quarter, Coca-Cola earned 45 cents per share, minus a Russian-linked impairment charge. Furthermore, the company’s $10.13 billion net sales rise is a 7% increase from a year ago, facilitated by a 12% price markup increase.
According to Coca-Cola, it also sold a more expensive combination of drinks in the fourth quarter of last year.
Company CEO Weighs In
Coca-Cola chief executive officer James Quincey revealed that European consumers changed their behavior last quarter due to rising inflation. As a result, Coke’s unit case volume declined by 5% in Europe and its African and Middle Eastern segments. Meanwhile, the multinational beverage corporation’s unit case volume in North America remained flat.
Commenting on Coca-Cola’s overall performance for the fourth quarter, Quincey said:
“While 2022 brought many challenges, we are proud of our overall results in a dynamic operating environment. As we begin 2023, we continue to invest in our capabilities and strengthen alignment with our bottling partners to maintain flexibility. We are keeping consumers at the center of our innovation and marketing investments while also leveraging our expertise in revenue growth management and execution.”
Furthermore, Quincey explained that the beverage giant’s growth culture opens up new approaches and more experimentation to drive growth. In addition, the CEO also pointed out that Coke’s improved agility should add more value to its stakeholders.
Following its Q4 2022 outing, Coca-Cola forecasts a comparable revenue growth of 3% to 5% for 2023. In addition, the beverage giant projects earnings per share growth of 4% to 5% this year.