Coca-Cola announced on Tuesday that it is optimistic about managing the impact of the Trump administration’s aluminum tariffs, thanks to strategic supplier shifts and increased use of plastic bottles, among other measures.
Company Chairman and CEO James Quincey addressed investors during a conference call, stating that while the tariffs represent a significant cost, they will not drastically affect the company’s extensive U.S. operations. He explained, “It’s a cost. It’ll have to be managed.” Quincey acknowledged the challenge posed by the increased tariffs but emphasized that the company is prepared to navigate these changes effectively.
On Monday, President Trump escalated the existing 10% tariff on aluminum imported into the U.S. to a substantial 25%. This announcement came alongside Coca-Cola’s release of its fourth-quarter earnings report, which exceeded expectations despite the added uncertainty from the tariffs.
For the period of October to December, the Atlanta-based beverage leader reported a 2% rise in unit case volumes, a positive turnaround from a 1% decline in the previous quarter. Analysts had predicted a less than 1% increase, making the actual figure a notable surprise.
Coca-Cola’s revenue climbed by 6%, reaching $11.5 billion, significantly surpassing the $10.68 billion forecast by analysts. Quincey attributed the Q4 success to successful limited-time beverage offerings, including flavors like Sprite Winter Spiced Cranberry and Oreo-flavored Coke. He hinted at further innovation for the upcoming year, revealing that Coca-Cola Orange Cream will soon launch in the U.S. and Canada.
The company has also observed a resurgence in sales across regions where it had faced challenges, particularly in China and the Middle East. On the same day, McDonald’s reported improved sales performance in the Middle East during the fourth quarter, highlighting a regional trend of recovery.
Coca-Cola Zero Sugar experienced remarkable growth, with case volumes rising by 13% worldwide in Q4. Additionally, volume increases were noted in water, coffee, tea, and sports drinks, each rising by 2%, while juice, dairy, and plant-based drink volumes experienced a dip of 1%.
To address inflationary pressures, particularly in markets like Argentina, Coca-Cola implemented a price increase of 9% during the quarter. This hike was also fueled by a more considerable sale mix of premium products like Fairlife milk and Topo Chico sparkling water. Quincey indicated that lower-income consumers in the U.S. and Western Europe reduced their spending in the past year and may continue this trend. However, he maintained that global demand remains strong overall.
Quincey concluded by asserting that the consumer environment appears stable on a global scale, with encouraging economic growth evident across various markets. Coca-Cola continues to adapt by making its products more affordable through smaller pack sizes and refillable bottles.
Coca-Cola’s net income rose by 11%, reaching $2.2 billion for the October-December timeframe. After adjusting for one-time costs, the company reported earnings of 55 cents per share, surpassing analysts’ predictions of 52 cents.
Looking ahead, Coca-Cola is projecting organic revenue growth between 5% and 6% for 2025, following a robust 12% organic revenue increase last year. The positive outlook was reflected in a nearly 4% rise in Coca-Cola’s shares in early Tuesday trading.
Coca-Cola rebounds in sales volume, boosting revenue by 6% in Q4
