The Coca-Cola Company
04/30/2024 | Press release | Distributed by Public on 04/30/2024 05:10
Coca-Cola Reports First Quarter 2024 Results
Global Unit Case Volume Grew 1%
Net Revenues Grew 3%;
Organic Revenues (Non-GAAP) Grew 11%
Operating Income Declined 36%;
Comparable Currency Neutral Operating Income (Non-GAAP) Grew 13%
Operating Margin Was 18.9% Versus 30.7% in the Prior Year;
Comparable Operating Margin (Non-GAAP) Was 32.4% Versus 31.8% in the Prior Year
EPS Grew 3% to $0.74; Comparable EPS (Non-GAAP) Grew 7% to $0.72
ATLANTA, April 30, 2024 - The Coca-Cola Company today reported first quarter 2024 results. "We're encouraged by our start to 2024, delivering another quarter of volume, topline and earnings growth amidst a dynamic backdrop," said James Quincey, Chairman and CEO of The Coca-Cola Company. "We believe our global system is primed for sustained success, thanks to the right strategies, clear alignment, a powerful portfolio and strong execution."
Highlights
Quarterly Performance
- Revenues: Net revenues grew 3% to $11.3 billion, and organic revenues (non-GAAP) grew 11%. Revenue performance included 13% growth in price/mix and a 2% decline in concentrate sales. Concentrate sales were 3 points behind unit case volume, largely due to the timing of concentrate shipments and the impact of one less day in the quarter.
- Operating margin: Operating margin was 18.9% versus 30.7% in the prior year, while comparable operating margin (non-GAAP) was 32.4% versus 31.8% in the prior year. The operating margin decline was driven by items impacting comparability, including a charge of $765 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with our acquisition of fairlife, LLC ("fairlife") in 2020 and a non-cash impairment charge of $760 million related to the BODYARMOR trademark, as well as currency headwinds. Comparable operating margin (non-GAAP) expansion was primarily driven by the impact of refranchising bottling operations and strong topline growth, partially offset by currency headwinds and an increase in marketing investments.
- Earnings per share: EPS grew 3% to $0.74, while comparable EPS (non-GAAP) grew 7% to $0.72. EPS performance included the impact of a 7-point currency headwind, while comparable EPS (non-GAAP) performance included the impact of a 9-point currency headwind.
- Market share: The company gained value share in total nonalcoholic ready-to-drink (NARTD) beverages.
- Cash flow: Cash flow from operations was $528 million, an increase of $368 million versus the prior year, driven by strong business performance and working capital initiatives, partially offset by currency headwinds. Free cash flow (non-GAAP) was $158 million, an increase of $274 million versus the prior year.
Company Updates
- Trademark Coca-Cola led growth supported by broad innovation: With consumers increasing their engagement across various social media platforms, the company launched Coca-Cola Happy Tears Zero Sugar, its first product sold exclusively on social media in the United States and Great Britain. Building on the Coke Creations platform, Happy Tears reached consumers with a limited-edition beverage inspired by tears of joy from small acts of kindness. "Hype kits" containing Coca-Cola Happy Tears Zero Sugar and kindness-themed accessories sold out in less than 24 hours and garnered more than 2 billion impressions. In the quarter, the company also introduced Foodmarks by Coca-Cola - as part of the "Recipe for Magic" platform - in over 4,000 locations worldwide. To drive excitement, unique dining experiences were created that pair Coke with meals and local culture. In Thailand, legendary restaurants were transformed into Foodmarks, celebrating street food, music and Coca-Cola. This kind of marketing, which connects consumption occasions with live experiences and consumer passion points, contributed to Trademark Coca-Cola value share gains and volume growth ahead of total company growth. The company also continued to meet consumers' evolving needs by extending offerings and distribution with affordable and premium packages. In Africa, packages at affordable price points, such as returnable glass and plastic, grew volume double digits for the second consecutive quarter. In the United States, the company continued to expand mini-can availability through mini-can variety packs in the club channel.
- Continuing to drive digital capabilities: The company continued to leverage digital tools to deepen end-to-end relationships with consumers and customers. For example, the company used scannable codes on its packaging to engage consumers, collect first-party data and drive transactions. In the first quarter, there were over 200 active connected packs in more than 40 global markets offering exclusive personalized experiences to consumers. Additionally, the company and its bottling partners continue to invest in digitizing their customer base by integrating fragmented trade customers into B2B platforms. In the first quarter, there was an 8% increase of connected customers compared to the prior year, reaching nearly 8 million customers on B2B platforms. The company continues to utilize the power of AI, as AI-enabled suggested orders are fueling growth. In Latin America, suggested order capabilities have benefited over 3 million outlets, while in India, retailers are leveraging AI-powered suggested order recommendations on Coke Buddy, a customer engagement platform, to place bulk orders via the app. At the shopper level, digital capabilities enabled bottling partners to personalize point-of-sale messaging and drive basket incidence more effectively and efficiently. In Japan's vending channel, the Coke On app has reached over 50 million downloads and accounts for more than 1 million transactions per day.