Dee-Ann Durbin
Coca-Cola reported better revenue than expected in the first quarter, saying the tariff impact on its business is likely to be “manageable.”
Cola and other beverage manufacturers face 25% tariffs on the aluminum used in cans. Last week, rival PepsiCo lowered its annual revenue expectations due to tariff impacts.
“Based on what we know today, dynamic tariff situations can affect the pockets of the system’s cost structure and the consumer sentiment in the market,” Cola’s chief financial officer John Murphy said in a conference call with investors on Tuesday.
But Murphy said Coke has “a number of levers to manage the impact.” The company has previously said it could shift its aluminum suppliers and rely more on plastic and glass bottles.
Coke’s unit cases rose 2% in the first quarter, with high demand in China, India and Brazil. The Coca-Cola Zero Sugar was outstanding, with case volume increasing by 14%. Demand for sports drinks and coffee has declined.
In North America, case volumes have decreased by 3%. Prices rose 8%. This is because Cola sold a more expensive mix of premium drinks like Topochico’s Sparkling Water and Fairlife Milk.
Cola’s chairman and CEO James Quincy said the video circulating on social media in February hurt U.S. sales, particularly among Hispanic consumers in the South. The video alleges that Coke is reporting his country’s workers to US immigrants and customs enforcement officers, asking for a boycott of the company.
Quincey said the video’s claims were false and the controversy is largely waning. Coke is trying to regain Hispanic sales by promoting the company’s local economic impact and providing targeted transactions, he added.
Aside from the video, Quincey said there is a pullback to buying on both sides of the US-Mexico border due to consumer uncertainty.
“I think some of the geopolitical tensions were just getting people a little more cautious about their spending,” he said.
The company said Tuesday that revenues fell 2% from January to March to $11.1 billion. Coke, adjusted to one-off items, including currency fluctuations, reported revenue of $11.2 billion. It beat Wall Street’s $11.15 billion forecast, according to analysts voted by FactSet.
Net income rose 5% in the quarter to $3.3 billion. The Atlanta company was adjusted for one-off items and won 73 cents per share. It beat the 72 cent expectation.
Cola eased expectations for full-year profits on Tuesday. The company said it expects growth from 7% to 9%, with annual adjusted revenues falling from 8% to 10% previously. Cola made $2.88 per share in 2024.
Coca-Cola shares were less than 1% in trading Tuesday morning.
Original issue: April 29, 2025, 2:14pm EDT
