Coca-Cola's Bottom Line Bubbles Up, Company Raises FY24 Revenue Projections

Coca-Cola Company KO reported first-quarter FY24 sales growth of 3% year-on-year to $11.3 billion, beating the analyst consensus estimate of $11.01 billion.

Revenue performance included a 2% decline in concentrate sales and a 13% growth in price/mix. Unit case volume grew 1% in the quarter. Organic revenues increased 11%.

Coca-Cola’s organic revenue in Europe, Middle East and Africa rose 15% in the first quarter, while in North America, it increased 7%.

Gross profit rose 6% to $7.065 billion with a profit margin of 62.5%. The operating margin contracted 1,180 basis points to 18.9%, while the comparable operating margin gained 60 basis points to 32.4%. 

Operating income for the quarter decreased 36% to $2.14 billion. Adjusted EPS of $0.72 beat the consensus estimate of $0.70.

Operating cash flow generated for the quarter was $528 million, an increase of $368 million from the prior year. Free cash flow totaled $158 million. KO held $16.9 billion in cash and equivalents as of March 29.

Outlook: Coca-Cola raised its FY24 organic revenue growth outlook from 6%-7% to 8%-9%. KO raised comparable currency neutral EPS growth outlook from 8%-10% to 11%-13% and continues to see comparable EPS growth of 4%-5% versus $2.69 in 2023.

Coca-Cola still expects to generate free cash flow (non-GAAP) of approximately $9.2 billion through cash flow from operations of approximately $11.4 billion, less capital expenditures of approximately $2.2 billion.

Price Action: KO shares are trading lower by 0.18% at $61.93 in premarket at the last check Tuesday.

Photo by Alessandro D’Antonio via Unsplash