Coca-Cola raised some of its full-year financial projections Tuesday as it reported better-than-expected profits, pointing to a lift from premium products that countered weakness in some markets.
The soda giant reported profits of $2.4 billion in the second quarter, down five percent from the year-ago period. Revenues rose three percent to $12.4 billion.
While volumes rose just two percent, results were boosted by a nine percent rise in “price/mix” reflecting retail price hikes, as well as Coca-Cola’s shifting offering of products that has tilted towards higher-end goods.
In North America, “price/mix” jumped 11 percent, with half of the boost in price and half from products such as Coca-Cola’s juice business or the Topo Chico seltzer brand, company officials said.
While lower-income consumers may have cut back on demand, there was enough spending on “more premium categories or more premium price points and experiences” to offset them, said Chief Executive James Quincey.
“So that’s all aggregating out at a sort of resilience for the average overall consumer,” he said on a conference call with analysts.
Executives reported a broadly solid performance in North America, while the European business was crimped by a lackluster away-from-home business attributed to bad weather.
However, Quincey said Coca-Cola plans aggressive marketing pushes in major musical and athletic events, including the Olympics.
Shares of Coca-Cola rose 0.7 percent in afternoon trading.
