Coca-Cola forecasts modest growth amid demand concerns

Coca-Cola on Tuesday reported weaker-than-expected quarterly revenue, falling short of Wall Street’s projections for the first time in five years.

However, demand for its drinks in North America and Latin America is beginning to show signs of improvement.

Looking ahead to 2026, the company is projecting organic revenue growth of 4% to 5% and comparable earnings per share growth of 7% to 8% for the full year.

“It’s right at the beginning of the year, and I think we’ve taken a realistic and prudent approach to a number of markets out there, particularly some of the international markets where we want to see conditions improve, and we need to do some things to execute better,” outgoing CEO James Quincey said on CNBC’s “Squawk on the Street.”

Here’s what the company reported for the period ended Dec. 31 compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

• Adjusted earnings per share: 58 cents vs. 56 cents expected
• Adjusted revenue: $11.82 billion vs. $12.03 billion expected

The beverage giant reported fourth-quarter net income attributable to shareholders of $2.27 billion, or 53 cents per share, up from $2.2 billion, or 51 cents per share, a year earlier.

Excluding transaction gains and other one-time items, Coke earned 58 cents per share.

Net sales rose 2% to $11.82 billion.

Organic revenue, which strips out acquisitions, divestitures and currency, increased 5% in the quarter.

Unit case volume rose 1% in the quarter, marking the second straight quarter of growth for the company. The metric excludes the impact of pricing and foreign currency to reflect demand.

Like rival PepsiCo, Coke has seen demand for its drinks fall as budget-conscious shoppers try to save more on their grocery bills and dine out less frequently. Coke’s overall volume for 2025 was unchanged from the prior year.

But there have been some bright spots, like Smartwater and Fairlife, showing that consumers are still willing to pay more for premium drinks.

And two key markets for Coke are starting to show signs of improvement. Coke’s volume in North America increased 1%, while it rose 2% in Latin America.

Worldwide, Coke’s water, sports, coffee and tea division outperformed the rest of its portfolio, signaling consumers’ willingness to spend on drinks they perceive as healthier options. The segment saw volume grow 3%, thanks to higher demand for brands like Smartwater and Bodyarmor.

The company’s sparkling soft drinks business reported flat volume. Its namesake soda saw volume rise 1% in the quarter, while Coke Zero Sugar reported that its volume climbed 13%.

Coke’s juice, value-added dairy and plant-based beverages division reported that volume fell 3%. Higher demand for Fairlife was offset by the sale of Coke’s finished product operations in Nigeria to one of its bottlers.

Tuesday marks Quincey’s last earnings report as CEO. The company announced in December that Chief Operating Officer Henrique Braun will succeed him as chief executive, effective March 31.

Braun said on the company’s conference call Tuesday that he wants to improve Coke’s speed when taking new products to market, better integrate its marketing where customers actually buy its drinks and continue efforts to digitize every step of its system.

“Our system needs to focus on being a little bit better and sharper everywhere to drive transformation and impact,” Braun said.

The company also plans to stay “flexible and opportunistic” when it comes to acquisitions, according to CFO John Murphy. While he noted that Coke’s track record hasn’t been perfect, he added that almost half of the company’s 32 billion-dollar brands were the result of deal-making.

Executives plan to share more about the company’s future priorities during its Feb. 17 presentation at the annual CAGNY conference.

As of Tuesday’s open Coca-Cola shares have risen roughly 20% over the last year, raising its market value up to more than $330 billion.