• Organic Revenue Growth: 6% growth, reflecting performance at the high end of the long-term growth algorithm.
• Volume Growth: 2% growth in unit case volume.
• Price Mix Growth: 5% growth driven by pricing actions across markets.
• Comparable Gross Margin: Increased approximately 30 basis points.
• Comparable Operating Margin: Increased approximately 130 basis points.
• Comparable EPS: $0.73, a 1% increase year-over-year despite currency headwinds.
• Free Cash Flow: Approximately $560 million, excluding the fairlife contingent consideration payment.
• Net Debt Leverage: 2.1 times EBITDA, at the low end of the targeted range.
• 2025 Guidance: Expected organic revenue growth of 5% to 6% and comparable currency neutral EPS growth of 7% to 9%.
• Currency Headwinds: Anticipated 2 to 3 point impact on net revenues and 5 to 6 point impact on EPS for full year 2025.
• Effective Tax Rate: Expected to be 20.8% for 2025.

• Warning! GuruFocus has detected 5 Warning Sign with CECO.

Release Date: April 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Coca-Cola Co (NYSE:KO) achieved 2% volume growth and organic revenue growth at the high end of its long-term growth algorithm.
• The company expanded comparable gross and operating margins, demonstrating strong financial performance.
• Coca-Cola Co (NYSE:KO) won value share across all global beverage categories, including at home and away from home.
• The company saw continued volume growth for Coca-Cola Zero Sugar and strong performance from brands like fairlife and Topo Chico Sabores.
• In Asia-Pacific, Coca-Cola Co (NYSE:KO) delivered volume, organic revenue, and comparable currency neutral operating income growth, with strong performance in India and China.

Negative Points

• Volume performance in North America was impacted by weakening consumer sentiment, particularly among Hispanic consumers.
• In Mexico, Coca-Cola Co (NYSE:KO) faced weaker momentum due to geopolitical tensions and diminished consumer sentiment.
• The company experienced mixed performance in Europe, with volume declines in both Western and Eastern markets.
• Coca-Cola Co (NYSE:KO) faced challenges in ASEAN, with weaker performance in Thailand and Indonesia offsetting strong performance in the Philippines.
• Currency headwinds posed a challenge, with an approximate 5% impact on comparable earnings per share for the full year 2025.

Q & A Highlights

Q: Why did Coca-Cola maintain its full-year 2025 earnings guidance despite a strong Q1 performance? A: John Murphy, President and CFO, explained that the decision to maintain guidance is due to the early stage of the year and the volatile currency environment. While the company has hedged most of its G10 currencies, emerging markets remain unpredictable. Coca-Cola is confident in its full-year guidance, emphasizing the importance of looking at the full year rather than individual quarters.

Q: Can you elaborate on the challenges faced in Mexico and the actions being taken to address them? A: James Quincey, CEO, noted that Mexico experienced softness due to cycling strong growth from the previous year, calendar shifts, and geopolitical tensions affecting consumer sentiment. Coca-Cola is focusing on affordability with refillables and value, reinforcing local campaigns like "Hecho en Mexico," and partnering closely with the fragmented trade to regain momentum.

Q: How is Coca-Cola addressing consumer softness and brand sentiment issues in the US? A: Quincey highlighted the importance of agility and reprioritization within the company's successful US strategy. Despite challenges like false videos impacting brand sentiment, Coca-Cola is focusing on reinforcing local economic impact, affordability, and tailored promotions to win back consumers, particularly in the Hispanic demographic.

Q: What is Coca-Cola's approach to managing global trade dynamics and potential tariff impacts? A: Quincey stated that while Coca-Cola's operations are primarily local, they are not immune to global trade dynamics. The company is exposed to tariffs on certain inputs like orange juice and aluminum, but these are small relative to the total cost structure. Coca-Cola is leveraging its local franchise model to manage these impacts and maintain current pricing plans.

Q: How is Coca-Cola leveraging its global and local brand portfolio in the current environment? A: Quincey emphasized the importance of making global brands locally relevant. The company is not shifting focus from global to local brands but is reinforcing the local production and distribution of global brands. This strategy, combined with affordability initiatives, is key to maintaining brand strength amid geopolitical tensions.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.