The Coca-Cola Company closed out FY2024 with organic revenue and operating margin up in double digits driven by higher pricing and moderating volume.
- Q4 organic revenue was up 14%, driven by 9% elevated pricing.
- FY2024 organic revenue was 12% with prices rising 11%
- Comparable earnings-per-share (EPS) grew 12% to $0.55 in Q4 and 7% to $2.88 in FY2024
- Operating margin rose 23.5% in the quarter, compared to 21% in the prior year period.
Consolidated volume was up 2% in sparkling soft drinks, water, sports drinks, coffee and tea segments during the quarter. Juice, value-added dairy and plant-based beverages declined 1% in Q4 and were flat for the full-year. Among Coke’s various brands, Coca-Cola Zero Sugar led the pack with 13% volume growth in the quarter.
“We’re responding to market dynamics locally to execute on our global objectives,” said chairman and CEO James Quincey in prepared remarks. “While we’re delivering on our near-term commitments, we’re also investing to improve execution, build capabilities and get more granular across our strategic growth flywheel.”
Planning Around Tariffs
Leaning on its regional bottlers in North America and abroad has allowed the beverage giant to hedge against “macroeconomic headwinds” like tariffs. When asked how Coca-Cola was preparing for an uncertain global trade environment, Quincey responded that Coke is taking an “adapt and mitigate” approach to the current economic landscape.
“It’s part of a total adaptation plan we use around the world,” he said. “For example, if aluminum cans become more expensive, we can put more emphasis on PET bottles. It’s an opportunity to do mixed management between different packaging materials.”
The company will use hedging programs to reduce the impact of higher prices on commodity ingredients like fruits (for juices), coffee or tea as well.
“While it’s a global business, it’s very local,” he said. “Yes, every bottler will be importing something from somewhere as a piece of the puzzle, but the economics are more predominantly local than they are global.”
While the industry landscape remains “dynamic,” Coke is expecting inflation to moderate in 2025 but is still ready to use pricing to ensure revenue gains.
Guidance for 2025 has Coca-Cola forecasting organic revenue growth between 5% to 6%. Comparable EPS growth is expected between 2% to 3%.
Turning to gross margin expansion, Coke leadership called out its efforts in 2024 accelerating placement of cold-drink equipment globally where it added 250,000 new outlets and nearly 600,000 new coolers where it sees an opportunity to increase visibility.
It also will be leaning heavier on more efficient marketing like its use of generative AI in its Christmas marketing campaign.
“It was both quicker and cheaper to make the ad,” Quincey said. “It’s important to say that we are not backing off bias to investor growth. This is not less marketing. This is more productive spend.”