Shares in Coca-Cola (KO) bubbled up 6% to $79.6 on Wall Street after the soft drinks giant’s Q1 results beat estimates.
| Share price: $79.6 (+5.5%) | Market cap: $325bn |
| PE ratio: 24.8x | Dividend yield: 2.8% |
The Atlanta-based behemoth is seeing resilient demand for its beverages. Accordingly, Coca-Cola felt confident enough to raise its FY26 earnings outlook.
Full of fizz
For the quarter ended 3 April 2026, revenue fizzed up 12% to $12.47 billion. That was ahead of the $12.24 billion Wall Street expected. Earnings per share rose 18% to 86 cents, comfortably above the 81 cents consensus estimate.
Organic revenue grew by 10% in Q1. That represented the company’s best organic growth in five quarters. Coca-Cola has been offering more single-serve and smaller sizes at lower price points for the most cash-strapped consumers.
At the same time, the company has been selling premium drinks to consumers who can afford them.
Global share gains
Global unit case volume increased by a solid 3% in Q1 including 4% volume growth in North America. Coca-Cola also brewed up volume gains in Europe, Middle East & Africa, Latin America and Asia Pacific.
The water, sports, coffee and tea segment reported the strongest global growth in Q1. And the sparkling soft drinks division reported a 2% volume increase. This was supported by 2% growth in ‘trademark’ Coca-Cola and a 13% jump in Coca-Cola Zero Sugar.
Showing some bottle
Coca-Cola is now guiding for FY26 earnings per share growth of 8% to 9%. That is an upgrade on its previous 7% to 8% forecast. However, the company maintained its previous outlook for organic revenue growth in the 4% to 5% range.
‘We’ve had a strong start to the year,’ said new CEO Henrique Braun. ‘Our performance this quarter reflects our unwavering focus on staying close to the consumer, executing locally and managing complexity.
‘Yet there’s so much more we can do as we navigate a dynamic environment. Our team is motivated by the opportunity to build on the company’s great foundation.’
We remain big fans of Coca-Cola. Efforts to win over consumers seeking refreshments at different price points are clearly paying off. And the company continues to gain market share in non-alcoholic drinks thanks to its strong brands, pricing power and global distribution.
One of Warren Buffett’s most profitable investments, Coca-Cola expects to generate free cash flow of around $12.2 billion this year.
Admittedly, Coca-Cola is undergoing a leadership change. However, investors should be reassured by the fact Braun has spent almost three decades at Coca-Cola. Braun is said to know the company’s complex bottling and distribution system inside out.
Read the press release here: https://investors.coca-colacompany.com/financial-information
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