Coca-Cola earnings rise as Mr. Pibb gets a caffeine jolt
Coca-Cola lifted its outlook after stronger sales, with a revamped Mr. Pibb and other new drinks helping volumes rise.
By Sal Moretti · Money Reporter
3 min read
Coca-Cola earnings beat Wall Street expectations Tuesday as the company pointed to a fizzy little helper: a revived Mr. Pibb with more caffeine and a bigger cherry kick.
Coca-Cola management said the updated soda, which has 30% more caffeine, posted volume growth of more than 20% in the second quarter. Volume measures how much product the company sells, separate from price changes.
The company said the Mr. Pibb comeback also includes a zero-sugar version. The soda first arrived in 1972 as Coca-Cola’s answer to Dr Pepper, then was renamed Pibb Xtra in 2001. Coca-Cola announced in October that it would bring back the original Mr. Pibb name with new versions, with a national rollout taking place this year.
Why is Mr. Pibb helping Coca-Cola?
Coca-Cola Chief Executive Henrique Braun said on the company’s earnings call that the new Mr. Pibb helped the brand stay relevant. Management also said smaller cans and variety packs are making its drinks more accessible for shoppers watching their budgets.
The company is trying to keep consumers interested at a time when food and beverage companies are fighting cheaper store brands. Albertsons executives said on the grocer’s earnings call last week that shoppers were shifting toward private-label products.
Coca-Cola executives also highlighted other newer drinks. They said Sprite + Tea has reached China after performing well in the U.S., and that Bodyarmor Fit, a zero-sugar sparkling sports drink with electrolytes and caffeine, has broadened Coca-Cola’s functional beverage lineup.
Management said those launches helped global volumes rise 5% in the quarter.
How did Coca-Cola perform in the second quarter?
Coca-Cola reported second-quarter sales of $13.4 billion, up 7% from a year earlier. That topped the $13.17 billion expected by analysts surveyed by FactSet.
The company posted adjusted earnings of 97 cents a share, an 11% increase and ahead of FactSet estimates for 93 cents a share.
Coca-Cola also raised its full-year adjusted earnings-per-share forecast. The company now expects growth of 9% to 10%, compared with its prior outlook for an 8% to 9% increase.
Its organic revenue forecast also edged higher. Coca-Cola said it now expects about 5% organic revenue growth, a measure that strips out items such as currency swings. Its earlier forecast called for 4% to 5% growth.
Coca-Cola shares rose 4.8% Tuesday to around $88, putting the stock on track for a record high. The shares are up 27.5% this year.
What else did Coca-Cola say?
Coca-Cola said its World Cup marketing efforts produced more consumer data. The company also addressed the cyberattack on its Fairlife milk business, saying most production had resumed at its four U.S. facilities and that store-shelf availability was largely unaffected.
The broader food and beverage sector has been pushing new products tied to wellness, protein, fiber and functional hydration. PepsiCo and Kraft Heinz are among companies that have recently highlighted drinks and snacks aimed at those trends, which executives have tied to wellness interest and the adoption of GLP-1 drugs.
This story draws on original reporting from MarketWatch.