- Coca-Cola reported a decline in revenues in its third-quarter earnings on Wednesday.
- Despite the slide, revenue was higher than analysts' expectations.
- A jump in sales of Coke Zero by 11% helped Coca-Cola beat expectations.
Coca-Cola posted its first quarterly decline in revenue this year in its third-quarter earnings on Wednesday.
Net revenues fell by 1% to $11.9 billion for the three months to September 30. The results beat analysts' predictions, which had forecast revenues of $11.65 billion for the beverage giant.
Earnings per share declined 7% to $0.66, lower than the analyst consensus of $0.74.
Shares dipped more than 2% in premarket trading, but the stock is up 16% this year.
Coca-Cola said its slightly better-than-expected revenue performance had been driven by a 10% jump in price/mix, the amount the company adjusts prices, versus a 2% decline in concentrate sales.
The results were boosted by an 11% jump in sales of Coca-Cola Zero Sugar across all markets.
"Our business continues to demonstrate resilience in the face of a dynamic external environment," said CEO James Quincey.
"We are encouraged by our year-to-date performance and our system's ability to manage near-term challenges while also remaining focused on long-term growth opportunities."
The soda giant also signaled that there was growing potential in the non-carbonated drink market, pointing to its success as an official sponsor of the 2024 Paris Olympics.
"During the opening and closing ceremonies in Paris, a special-edition smartwater gold bottle for athletes quickly garnered 42 million impressions and contributed to smartwater gaining both volume and value share during the quarter," the company said.
Powerade, Fuze Tea, and Topo Chico were also highlighted as regional leaders in its plans to evolve a "total beverage portfolio."
In recent quarters, strong international sales have helped boost Coca-Cola's results, offsetting weaker consumer demand in the US. However, in its third quarter, unit case volume declined in Europe, Middle East & Africa and Asia Pacific, and remained even in Latin America.
Investors will look to the soft drink maker's earnings for insight into consumer spending behavior heading into the year-end.
US consumers are thought to have spent excess savings from the pandemic and are now grappling with accumulated price increases driven by global inflation.
In September, core retail sales in the US grew by 2.4%. However, many retailers have taken creative approaches to incentivizing spending, including loyalty programs and exciting product offerings.
Retailers, including Costco, PepsiCo, and Walmart, have been cutting prices amid a pattern of more cautious consumer spending this year.
The results come after Coca-Cola's rival PepsiCo posted weaker-than-expected sales for the second quarter in a row. PepsiCo lowered its full-year organic sales outlook, saying it now expects a low-single-digit rise, down from the previously forecast 4% growth.
PepsiCo executives said the "cumulative effects of inflationary pressures continue to impact budgets and spending patterns."