Coca-Cola lifts profit forecast as international soda demand holds firm

Coca-Cola Lifts Annual Profit Forecast as Global Soda Demand Remains Strong

Strong Performance and Market Trends

By Juveria Tabassum

Oct 27 (Reuters) - Coca-Cola on Tuesday raised its annual profit forecast, betting on soft drink demand in markets such as India and Brazil, while higher sales of pricier beverages such as fairlife milk offset rising input costs in North America.

Volume Growth and Competitive Landscape

The company's strong volume growth this year across its trademark sodas and other beverage brands contrasts with rival PepsiCo's struggles with weak snack demand in the United States.

Consumer Strategies and Product Offerings

Coca-Cola has sought to win over increasingly selective consumers with smaller, cheaper packs in the United States alongside pricier offerings such as Coca-Cola Cherry Float and new Topo Chico and fairlife varieties.

International Market Contributions

Growth in India, China, Mexico and Brazil helped global unit case volumes rise about 5% in the third quarter, the company said. North American volumes were flat, despite growth in its trademark sodas.

"The gap between Coke and peers is widening. As the market debates price increases, those delivering volume growth should outperform," Jefferies analyst Kaumil Gajrawala said.

Financial Outlook and Revenue Targets

Coca-Cola now expects comparable currency-neutral earnings per share to grow at least 9% in 2026, up from its previous forecast of 7% to 8%.

It also now targets annual organic revenue growth of at least 5%, compared with roughly 5% expected earlier.

Coca-Cola's shares were largely unchanged in premarket trading. The stock has jumped about 33% in 2026 and is on track for a third straight year of gains despite broader weakness in consumer spending and market volatility stemming from the Iran war.

Some investors may have been looking for a larger raise in annual targets, but maintaining prudence was understandable given the macro environment, RBC Capital Markets analyst Nik Modi said.

Costs, Margins, and Earnings Results

Rising Input Costs

Coca-Cola, like other consumer goods companies, faces higher packaging costs as the US war in Iran drives up commodity prices. The company said in July that aluminum and PET costs had risen more than expected this year.

Operating Margins and Revenue Beats

A 7.4% increase in third-quarter revenue, however, helped support its operating margin, which rose to 33.4%.

Revenue for the quarter ended October 2 reached $13.38 billion, beating analysts' estimate of $12.92 billion, according to LSEG data. Adjusted earnings of 91 cents per share also beat estimates of 88 cents.

(Reporting by Juveria Tabassum in Bengaluru and Alexander Marrow in London; Editing by Anil D'Silva)