The Coca-Cola Company KO has reported first-quarter 2025 results, wherein the top and bottom lines surpassed the Zacks Consensus Estimate. The company’s revenues declined year over year but earnings per share (EPS) improved. The results have benefited from continued business momentum, aided by enhanced pricing across markets. This quarter’s results once again highlight the strength of KO’s resilient, all-weather strategy.
Coca-Cola reported a comparable EPS of 73 cents in the first quarter, up 1% from the year-ago period. Comparable EPS also beat the Zacks Consensus Estimate of 71 cents. Unfavorable currency translations hurt the comparable EPS by 5 percentage points. Comparable currency-neutral earnings per share rose 6% year over year.
Revenues of $11.13 billion dipped 2% year over year but slightly surpassed the Zacks Consensus Estimate of $11.12 billion. Organic revenues rose 6% from the prior-year quarter, led by growth across all segments. Coca-Cola’s top line declined, led by soft performances across most operating segments, except for North America and EMEA. Improved price/mix and concentrate sales in the quarter were offset by adverse currency rates and the impacts of acquisitions, divestitures and structural changes. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
For the first quarter of 2024, KO gained a global value share in the total non-alcoholic ready-to-drink beverages category.
Shares of Coca-Cola increased 1.1% in the pre-market trading session following the better-than-expected first-quarter results. The Zacks Rank #3 (Hold) stock has risen 12.1% in the past three months compared with the industry’s growth of 6.6%.
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Detailed Picture of KO’s Q1 Volume & Pricing
In the reported quarter, concentrate sales moved up 1% year over year, and the price/mix improved 5%. The price/mix benefited from pricing actions across the marketplace, offset by an unfavorable mix. The impact of high-inflation markets was lower in first-quarter 2025 compared with the same period last year. In the first quarter, concentrate sales were 1 point behind unit case volume, mainly led by two fewer days in the quarter, partly offset by the timing of concentrate shipments.
Coca-Cola’s total unit case volume rose 2% year over year in the first quarter, driven by growth in China, Brazil and India.
Our model predicted year-over-year organic revenue growth of 5.2% for the first quarter, with a 4.1% gain from the price/mix and 1.1% growth in the concentrate sales volume.
CocaCola Company (The) Price, Consensus and EPS Surprise
CocaCola Company (The) Price, Consensus and EPS Surprise
CocaCola Company (The) price-consensus-eps-surprise-chart | CocaCola Company (The) Quote
Coming to the cluster-category performance, the unit case volume improved 2% year over year for sparkling soft drinks and 1% for the trademark Coca-Cola category. The trademark Coca-Cola category benefited from growth in the EMEA and Asia-Pacific segments. Coca-Cola Zero Sugar advanced 14%, aided by growth in all geographic operating segments. Also, the sparkling flavors category gained 2% year over year, backed by growth in the Asia Pacific.
Volume for juice, value-added dairy and plant-based beverages was up 1% in the first quarter, led by growth in the Asia Pacific.
Unit volumes for the water, sports, coffee and tea category improved 2% year over year in the first quarter. Coca-Cola witnessed 3% volume growth in the water category, led by improvement in EMEA, Latin America and the Asia Pacific. Sports drinks fell 1%, driven by declines in Latin America and the Asia Pacific. The coffee business dipped 2% due to declines in the Asia Pacific and EMEA. The tea volume was flat, backed by growth in the Asia Pacific and EMEA, offset by declines in Latin America and North America.
Peek Into KO’s Segmental Details
Reported revenues rose 3% year over year for North America and 1% for EMEA. However, revenues declined 3% for Latin America, 4% for the Asia Pacific and 20% for Bottling Investments.
Organic revenues improved 13% year over year in Latin America, 3% in North America, 7% each in EMEA and the Asia Pacific, and 2% in Bottling Investments.
Analyzing Coca-Cola’s Q1 Margins
In dollar terms, the operating income surged 71% year over year to $3.66 billion, including a 6-point impact of currency headwinds. Comparable operating income rose 4% year over year to $3.79 billion. Comparable currency-neutral operating income advanced 10% on strong organic revenue growth across most segments, effective cost management and the timing of marketing investments.
The operating margin of 32.9% in the first quarter expanded significantly from 18.9% in the prior-year quarter. The comparable operating margin expanded 134 bps to 33.8%. The comparable currency-neutral operating margin expanded 212 bps to 34.6%.
Our model predicted the first-quarter adjusted operating margin to expand 10 bps year over year to 32.5%, driven by a 20-bps decline in the SG&A expense rate.
KO’s Guidance for 2025
Management has outlined its guidance for 2025. It anticipates organic revenue growth of 5-6% for 2025. Comparable net revenues are expected to include a 2-3% currency headwind based on current rates and hedge positions. The guidance also includes a slight negative impact of acquisitions, divestitures and structural changes. The company anticipates an underlying effective tax rate of 20.8% for 2025.
Comparable currency-neutral EPS for 2025 is expected to increase 7-9% year over year compared with the prior mentioned 8-10%. The company anticipates comparable EPS growth of 2-3% for 2025 from the $2.88 reported in 2024. Comparable EPS growth is expected to include currency headwinds of 5-6%, and marginal impacts of acquisitions, divestitures and structural changes.
Management envisions an adjusted free cash flow of $9.5 billion for 2025, including $11.7 billion in cash flow from operations. Capital expenditure is likely to be $2.2 billion.
For second-quarter 2025, comparable revenues are expected to include a 3% currency headwind. Comparable EPS is estimated to include a 5-6% currency headwind.
Stocks to Consider
We have highlighted three better-ranked stocks from the Consumer Staples sector, namely Primo Brands Corporation PRMB, Keurig Dr Pepper Inc. KDP and Carlsberg CABGY.
Primo Brands is a branded beverage company focused on healthy hydration, delivering sustainably and domestically sourced diversified offerings. The company currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for PRMB’s 2025 earnings and sales indicates growth of 146.6% and 57.4%, respectively, from the previous year’s reported figures. Primo Brands has a trailing four-quarter average earnings surprise of 7.2%.
Keurig is a prominent integrated brand owner, manufacturer and distributor of beverages across the United States, Canada, Mexico, and the Caribbean. It presently has a Zacks Rank #2.
The Zacks Consensus Estimate for Keurig’s 2025 sales and EPS indicates growth of 5.5% and 5.7%, respectively, from the prior-year reported levels. KDP delivered a trailing four-quarter earnings surprise of 3.1%, on average.
Carlsberg is a brewing company. It has operations in Northern and Western Europe, Eastern Europe, and Asia. CABGY currently has a Zacks Rank #2.
The Zacks Consensus Estimate for the company’s 2025 sales and earnings implies growth of 23.4% and 3.8%, respectively, from the previous year’s reported numbers.
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