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Coca-Cola (KO) surpassed expectations on both the top and bottom lines in the third quarter, as customers increased their purchases of soft drinks and other beverages despite price increases by the corporation.
The soft drink behemoth's net income was $3.09 billion, or 74 cents per adjusted share. This was a 7% increase over the same quarter last year and above consensus projections of 69 cents per share. Revenue came in at little under $12 billion, up 8% year on year and exceeding the $11.4 billion expectation.
Unit case volume, which measures the amount of soda and other beverages consumed by customers, increased 2% over the previous quarter, buoyed by greater sales in Latin America and Asia Pacific. Coke Zero, the zero-sugar variant of Coca-Cola introduced in 2005, had a 3% increase in sales due to significant performance in North and Latin America.
"We delivered a generally solid quarter and are raising our full-year top-line and bottom-line guidance in light of our year-to-date performance," said James Quincey, chairman and CEO of Coca-Cola Company.
Despite Coca-Cola's recent price increases, which were intended to mitigate the consequences of increasing inflation, consumers have continued to spend on soft drinks and other beverages.
It demonstrates the resilience of American consumers, who have continued to spend despite continuously rising inflation and Federal Reserve rate rises. Consumer spending, which accounts for more than two-thirds of US GDP, is one of the reasons the US has avoided a recession thus far this year.
Coca-Cola, as a corporation that offers consumer basics, may be better suited to withstand an economic slump than companies that sell discretionary items. This year's downturn in discretionary spending has hurt big-box retailers like Target (TGT) and Walmart (WMT).
Coca-Cola increased its full-year earnings per share outlook in response to the better-than-expected results. Revenue is expected to climb 10% to 11%, up from 8% to 9% before.
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