By Ananya Mariam Rajesh
(Reuters) - Coca-Cola (NYSE:KO) Co on Tuesday raised its annual sales and profit forecasts for a second time this year, riding on resilient demand from consumers for its sodas, juices and energy drinks as well as higher prices.
Shares climbed 3% in early trading after the company also topped expectations for third-quarter results.
Rival PepsiCo (NASDAQ:PEP) also beat expectations and said it would hike prices next year as consumers continued to spend on products dubbed "affordable luxuries" at a time of elevated food prices and higher cost of living.
Coca-Cola's average selling prices rose 9% in the third quarter, the company said, while overall unit case volumes increased 2%.
In an earnings call, CEO James Quincey said the company was monitoring the impact of weight-loss drugs and "there is still a lot of views out there as to what impact, if any, it will have."
Investors have tracked comments from packaged food makers this earnings season on the potential impact from the surging popularity of weight-loss drugs such as Wegovy and Ozempic.
"It certainly feels that it has been a bit of an overreaction...as a pure liquids company and as more of a global company (Coca-Cola) will probably see the impact later than anyone," said Markus Hansen, a portfolio manager at Vontobel Quality Growth. Coca-Cola accounts for 3.98% of Vontobel’s Global Equity strategy as of June 30.
The maker of Sprite and Fanta now sees full-year organic revenue growth of 10% to 11%, compared with its prior forecast of an increase of 8% to 9%.
Coca-Cola forecast annual core earnings per share to rise between 7% and 8%, compared to a 5% to 6% increase earlier.
Third-quarter net revenue of $11.91 billion topped estimates of $11.44 billion, while adjusted earnings of 74 cents per share also beat expectations of 69 cents, according to LSEG data.