Coca-Cola Posts Higher Sales as Consumers Buy Drinks Away From Home

Coca-Cola Co. saw first-quarter sales rise as customers bought more beverages on the go.

The beverage company said global sales rose 5% in the first three months of the year to $10.98 billion, topping analyst expectations for $10.8 billion.

The growth came from both higher prices and higher volumes. Coca-Cola reported an 11% increase in price/mix, a figure that includes price increases as well as changes in package sizes and retail sales channels.

Global sales volumes were up 3% in a turnaround from last quarter, when they fell slightly for the first time in at least a year, largely due to one-time events including the company’s withdrawal from Russia and pandemic-related lockdowns in China.

The higher volumes were attributed to stronger sales at away-from-home venues. Growth in Coca-Cola’s developed markets, led by Mexico, Western Europe and Australia, outpaced more modest increases in developing and emerging markets, including China and India.

Coca-Cola said sales of its soft drinks and water ticked up during the quarter, led by 8% volume growth for its Smartwater brand. Meanwhile, revenue from sports drinks and tea slipped. The company stumbled last quarter on its $5.6 billion purchase of BodyArmor and its integration of the fast-growing startup brand with its other sports drink, Powerade.

Sales of its juice brands and dairy and plant-based beverages were even with the year-earlier quarter’s totals as growth in certain brands, such as its Fairlife milk products in the U.S. and Minute Maid Pulpy Orange juice in China, were offset by the suspension of operations in Russia.

The strong performance of Coca-Cola’s Costa brand in the U.K. and China boosted its coffee segment’s top line by 9%.

Coca-Cola’s operating margin tightened to 30.7% from 32.5% last year due to one-off items and unfavorable foreign-currency fluctuations that are expected to weigh on results again in the second quarter.

Stripping out those one-time items, Coca-Cola’s adjusted operating margin in the first quarter expanded thanks to its top line growth and the refranchising of its bottling operations, which offset higher marketing investments and operation costs, the company said.

Despite the margin contraction, earnings still jumped 12% to 72 cents a share on a profit of $3.1 billion. Adjusted earnings came in above analyst estimates at 68 cents a share.

Shares rose 1.4% to $64.96 in premarket trading.