Coca-Cola Raises 2026 Adjusted Earnings Growth Forecast to at Least 11%
Key Facts
Coca-Cola raised its forecast for adjusted earnings per share growth in 2026 to at least 11%, from a previous range of 9% to 10%, and kept its forecast for organic revenue growth at at least 5%, rather than about 5%. The update came with the release of third-quarter results on October 27, before the New York Stock Exchange opened, followed by an investor call the same day at 8:30 a.m. Eastern time. Chief Executive Henrique Braun said the results "reflect the continued momentum of our system and give us confidence in our updated full-year outlook." The forecast revision puts earnings growth at the forefront of the company's results, while the figures showed increases in sales volume and operating margins. The company's shares closed at $92.7 on October 26, according to EL7 data.
Third-quarter earnings per share rose 8% to $0.93, while comparable adjusted earnings per share increased 11% to $0.91. Operating margin was 33.4%, compared with 32.0% in the year-earlier period. Adjusted earnings per share topped analysts' estimate of 88 cents, according to LSEG data cited by Reuters; revenue also exceeded their estimate of $12.92 billion, though the available figures here do not include actual revenue. Compared with the second quarter, when earnings per share were $1.03 and margin was 34.9%, the third-quarter readings were lower sequentially on both measures. In the second quarter, the company said organic revenue growth and lower operating expenses supported adjusted margin, partly offset by higher input costs and increased marketing investment.
Global unit volume grew 5% in the third quarter, with contributions from India, China, Mexico and Brazil. Sales of sparkling beverages rose 5%, while Coca-Cola Zero Sugar recorded growth of 16%. The company said organic revenue rose, driven by a 7% increase in concentrate sales and 1% growth in price and product mix. Concentrate sales outpaced unit volume by two points, which the company attributed to shipment timing. Unit volume also rose 5% in the second quarter, while organic revenue growth then was 6%, compared with 7% in the third quarter.
In Europe, the Middle East and Africa, unit volume rose 5% and organic revenue increased 7% in the third quarter. But the company lost value share in the ready-to-drink non-alcoholic beverage category, with declines in France and the United Kingdom despite gains in Nigeria and Morocco. The results show a divergence within the region between sales growth and market-share trends. In North America, weakness in the restaurant sector weighed slightly on sales volumes, according to Reuters, citing Chief Financial Officer John Murphy. Demand pressures come alongside higher packaging and shipping costs, after the company said in July that aluminum and polyethylene terephthalate costs had risen more than it expected during the year.
Cash flow from operations since the start of the year was $12.5 billion, and adjusted free cash flow reached $11.4 billion through the third quarter. In the market, Reuters reported that the shares edged lower in early trading on October 27, despite rising about 33% since the start of the year. The CFO said underlying pressures on consumers remain and could continue through the rest of the year and into 2027. The company is scheduled to provide its full 2027 outlook when it reports fourth-quarter results. This follows its increase to the current-year forecast, which the company said was based on the third-quarter results it reported.