ii view: Coca-Cola sales outlook lacks fizz

Fourth-quarter results to 31 December  

• Adjusted revenues up 5% to $11.82 billion
• Adjusted earnings up 6% to $0.58 per share

Guidance: 

• Expects growth in annual adjusted sales for 2026 of between 4% and 5%

Chief executive James Quincey said:

“I’m encouraged by our performance in 2025 which showed both the resilience and momentum that define our business.”

“Looking ahead, we will focus on executing our strategy even better and positioning our system for long-term success.”

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ii round-up:

Coca-Cola Co (NYSE:KO) today predicted underwhelming sales for the year ahead as the drinks giant continues to endure a consumer switch away from sugary products towards healthy alternatives. 

Adjusted sales are forecast by the company to grow by between 4% and 5%, driving adjusted earnings per share up by 7-8%. Wall Street had forecast sales growth of at least 5% in 2026.  

Shares in the Dow Jones company fell 3% in early US trading having come into these latest results up by 12% in 2025. Coconut water seller The Vita Coco Co Inc (NASDAQ:COCO) rose 44% last year, while the Dow Jones index improved by 13%. 

Coca-Cola’s numerous brands include Fanta, Sprite, juice brand Innocent, as well as the Costa Coffee chain. Current chief operating officer Henrique Braun is set to succeed James Quincey, CEO for the last nine years, in late March. 

Adjusted sales for the fourth quarter to 31 December rose 5% to $11.82 billion. Analysts had expected sales of $12 billion. Adjusted earnings rose 6% to $0.58 per share.

Sales of Coca-Cola Zero Sugar climbed 13% in the quarter, while the group’s combined water brands, sports drinks and coffee and tea sales grew 3%. 

Geographically, volume growth up 3% for the EMEA (Europe, the Middle East and Africa) region outpaced a 1% fall in North America. 

ii view:

Started over a hundred years ago, Coca-Cola and its bottling partners today employ more than 700,000 people. Thirty of the group’s brands currently generate annual sales of $1 billion or more, half of which the company has grown from a starting position. Geographically, North America remains its biggest region, generating around 40% of revenue in 2025.  

For investors, increasingly health-conscious consumers look to be seeking alternatives to the group’s sugary products. A 2025 attempt to sell its Costa Coffee chain was later scrapped due to insufficient interest. Geopolitical tensions caused the company to previously exit Russia, while the sizeable proportion of sales generated overseas expose the business to currency risk.

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On the upside, the new CEO will likely reinvigorate group strategy. Recent management changes have also included a new executive responsible for digital affairs. More than ten brands have previously been acquired and then driven to generate annual sales of over $1 billion, while more than ten years of consecutive annual dividend increases and estimated yield of around 2.6% demonstrate a focus on shareholder returns.

On balance, this giant of the global soft drinks industry continues to justify its place in diversified investor portfolios. 

Positives: 

• Brand strength
• Progressive dividend policy

Negatives:

• Heightened geopolitical tensions
• Currency volatility

The average rating of stock market analysts:

Buy