Coca-Cola (KO, Financial) surpassed Q1 2025 EPS and revenue expectations despite currency headwinds and sluggish conditions in developed markets. This performance highlights the company's resilience and effective execution. In contrast to PepsiCo (PEP, Financial), which missed Q1 EPS estimates, Coca-Cola's pricing power and cost discipline drove its outperformance. The company reaffirmed its FY25 EPS and organic revenue growth guidance of 2-3% and 5-6%, respectively, indicating confidence in sustaining growth amid macroeconomic pressures.

• Coca-Cola leveraged its pricing strength to counter inflation and currency challenges, though pricing momentum slowed in Q1. After price/mix increases of 7-8% in Q3 2024 and 9% in Q4 2024, it moderated to 5% in Q1, with regions like EMEA seeing a price/mix increase of 3% compared to 11% in Q4.
• Global unit case volume grew 2% year-over-year, slightly down from Q4's 3% growth, driven by strong performances in emerging markets such as India, China, and Brazil. In developed markets, including North America, demand was subdued as consumers focused on value-conscious shopping, leading to a 1% unit case value growth in North America in Q1.
• Organic revenue growth slowed to 6% from 14% in the previous quarter, indicating a moderation in top-line momentum. Nevertheless, Coca-Cola's growth remains strong compared to PepsiCo's 1.2% organic revenue growth in Q1.
• Non-GAAP operating margin improved by 140 basis points year-over-year to 33.8%, supported by organic revenue growth, cost management, and strategic marketing spend timing. A 71% increase in operating income suggests effective cost control.

Despite challenges like currency fluctuations and softening consumer spending in developed markets, Coca-Cola demonstrated resilience by achieving robust operating income growth, highlighting its pricing power and effective cost management. This strong performance underscores Coca-Cola's ability to navigate challenging business environments and deliver solid results.