Coca-Cola's results were boosted by price hikes, with consumers thus far accepting the increases
New York (AFP) - Coca-Cola reported a jump in quarterly profits Monday in results showing the soda giant was able to implement price hikes with little sign of consumer pushback.
But the soft drink maker, which won strong revenue jumps in North America and most other regions, signaled it expects more of a negative consumer reaction to higher prices at some point given historic trends.
“Inflation generally ends with some pressure somewhere,” Chief Executive James Quincey said on a conference call with analysts.
“Will that be next quarter or will that be next year? I can’t give you the answer to that because it’s very dependent on some macros and it’s probably going to vary by country.”
The company’s strategy when faced with higher material or shipping costs is to lift prices when consumers are in better shape, Quincey said.
“Trying to catch up on pricing in a recessionary environment is very hard,” Quincey said. “And so we have a bias to action.”
In the first quarter, Coca-Cola reported profits of $2.8 billion, up 24 percent from the year ago period. Revenues rose 16 percent to $10.5 billion.
Sales volumes rose eight percent.
The beverage giant benefited from a recovery in consumption at entertainment spots, live sports and other “away-from-home” venues that suffered earlier in the pandemic.
Another positive driver was the rollout of the revamped Coca-Cola Zero Sugar, a popular diet cola, in some markets.
On the downside, Coca-Cola suffered a hit in China from the latest Covid-19 outbreak in the country. Revenues grew in Asia Pacific grew just one percent compared with a 22 percent jump in North America and a 34 percent increase in Latin America.
The company’s decision to suspend its business in Russia due to the Ukraine invasion has hit volumes by one percent and dented net revenue and operating income by one to two percent.
“We continue to believe the recovery in 2022 will be asynchronous,” said Quincey, as Coca-Cola confirmed most of its 2022 forecasts.
Shares of Coca-Cola were flat in afternoon trading at $52.25.