Coca-Cola Raises 2026 Minimum EPS Growth Forecast to 11%
Key Facts
Coca-Cola raised the lower end of its 2026 adjusted earnings per share growth forecast to at least 11%, compared with a previous range of 9% to 10%, after reporting 7% third-quarter revenue growth to $13.4 billion. Adjusted earnings per share rose 11% to $0.91, the company said in a statement. It also raised the lower end of its organic revenue growth forecast to at least 5%, from around 5% previously. Chief Executive Henrik Braun said the quarter's results "reflect the continued momentum of our system and give us confidence in our updated full-year guidance." The figures show performance combining sales growth and improved profitability, with sales volumes varying across markets and categories.
Quarterly revenue was driven by a 7% increase in concentrate sales and a 1% rise in price and mix, according to the company. Concentrate sales were two points ahead of unit case volume growth, a gap the company attributed to shipment timing. This means revenue growth did not rely solely on higher volumes; prices and product mix also contributed. Before the results, FactSet analysts estimated quarterly sales of $12.92 billion, compared with $12.46 billion in the same period a year earlier. They also expected organic revenue growth of 4.6%, versus 6% growth a year earlier.
Global unit case volume rose 5% in the third quarter, led by India, China, Mexico and Brazil, according to the company statement. Sparkling beverages grew 5%, while Coca-Cola Zero Sugar sales rose 16%. North America, however, was weaker than the global total in volume terms, with unit case volume flat in the region. Growth in the Coca-Cola brand offset declines in water, sports, coffee and tea categories, the company said. In the same region, price and mix rose 1% and operating income increased 5%, showing that flat volume coincided with growth in operating revenue.
Operating margin was 33.4% in the third quarter, compared with 32.0% in the same period a year earlier, the company said. Adjusted operating margin rose to 32.9% from 31.9%. The comparison shows year-over-year improvement in both reported and adjusted margins. On cash flow expectations, Coca-Cola raised its 2026 free cash flow forecast to at least $13.0 billion, from around $12.4 billion previously. The revision adds to the increases in the lower ends of its earnings and organic revenue growth forecasts.
In comparison with the previous quarter, the company reported second-quarter organic revenue growth of 6% and an 11% increase in adjusted earnings per share to $0.97. In the third quarter, adjusted earnings per share also rose 11%, but reached $0.91, while net revenue grew 7%. These figures provide a quarterly comparison of profitability, while organic revenue growth differs from net revenue growth. The higher annual guidance reflects the company's decision to raise the lower end of its earnings per share growth forecast, while keeping its organic revenue growth forecast near the previous estimate. The information available in the statement did not provide a further explanation for the difference between the measures.
Coca-Cola shares closed at $92.70 on October 26, according to EL7 data. That was before the company announced third-quarter results and updated its annual guidance on October 27. The company scheduled a call to discuss the results for October 27 at 8:30 a.m. Eastern time. The results statement did not mention the share price movement or link it to a specific cause. The U.S. advance economic indicators report is scheduled for release on October 28 and includes estimates for retail and wholesale inventories.
Coca-Cola said it will provide fiscal 2027 guidance when it reports fourth-quarter results. That places the next annual guidance at the release of the year's final quarterly results, without specifying a figure in the current statement. The forecasts published now are for fiscal 2026 and include adjusted earnings per share growth of at least 11% and organic revenue growth of at least 5%. The company also expects free cash flow of at least $13.0 billion during the year. Fourth-quarter results are the date the company has set for disclosing its 2027 guidance.