Releasing its FY2025 results this week, Coca-Cola delivered on the initial top line and bottle line guidance set a year ago. Net revenues were up 2% over the year, reaching $47.9bn, while organic revenues were up 5%.
However, fourth quarter revenue was lower than expected. Volumes were even for the year, although started to pick up over the fourth quarter. And the company has taken a cautious approach when issuing its guidance for the next year.
“We are responding to differing dynamics across our markets by adapting faster, leveraging our portfolio power and investing for growth,” said COO Henrique Braun, who will take over from James Quincey in March as CEO.
“As I prepare to step into the CEO role and think about what’s next, there will be a balance between continuing what’s working and evolving where we can to become more effective and efficient.”
2026 outlook
For Braun, that will mean honing down on three key areas. He wants to ensure the company keeps bringing in younger consumers; he’s going to prioritize consumer insights and understand local markets; and he wants to put digital to be the centre of the Coca-Cola system’s infrastructure.
Looking forward, the company is forecasting organic revenue growth of 4% to 5% for the next year.
That’s in line with the company’s long term growth algorithm, and is expected to be accompanied by earnings per share growth of around 5%-6%, said John Murphy, Coca-Cola’s CFO.
“We continue to focus on investing behind our brands to drive balanced top line growth, with volume as a key priority,” he said.
The good and the bad
- Coca-Cola Zero Sugar enjoyed 14% volume growth
- Water, sports drinks, tea and coffee grew 2% over the year
- Juice, value-added dairy and plant-based beverages declined 3%
Murphy highlights the unknowns posed by volatility in some key commodities and global trade dynamics.
Analysts, meanwhile, believe Coca-Cola can push to the top range of its organic revenue guidance: highlighting the fundamental strengths of the company.
“The guide seems conservative, but we view this as appropriate for the start of the year, especially with a new CEO that is likely going to want to push hard to accelerate the momentum,” say analysts from Jefferies in a note, maintaining a buy rating.
“Given the company’s strong brand portfolio, scale advantages and breadth of its bottling system, Coke offers one of the strongest franchises in global staples.”
That view is also held by TD Cowen, which maintains 2026 organic sales growth estimate of 5%, which is at the high-end of the guidance range.
It, too, has a buy rating: “We believe the company is well positioned to achieve its long term growth targets by leveraging their global bottler network and re-franchising strategy to drive market share gains; capitalizing on the on-trend segments of the beverage market (eg, RTD protein shakes) and commercializing beverage occasions in emerging markets,” share analysts in their note.
