Coca-Cola buoyed by soda sales abroad as North America lags

Coca-Cola Co. raised its 2026 full-year outlook on strong international demand for soda, but notched lower-than-expected sales volume in North America.

The beverage company now sees organic sales increasing at least five per cent this year, rather than growing about that much. Coca-Cola had already raised its guidance in July, pointing to the company’s increasing confidence in the year’s results.

“The strategy is working in an environment that continues to be very dynamic,” chief executive Henrique Braun said on a call with analysts Tuesday.

The Atlanta-based company reported strong growth in its sparkling soft drinks, with a particular boost from zero-sugar soda. Coca-Cola Zero Sugar saw a 16 per cent increase in unit case volume sales, the company said.

However, in North America, growth in Coca-Cola soda was offset by a decline in water, sports drinks, coffee and tea. Sales volume in North America was flat, coming in below the average of analysts’ estimates.

Braun said the company raised prices in North America “in line with inflation” and that volumes were dented by the timing of the July 4 holiday.

“This is a healthy beat-and-raise release,” Vital Knowledge analysts wrote in a note Tuesday. But “the full-year outlook hike isn’t dramatic, and North America sales were tepid.”

Shares of Coca-Cola were little changed Tuesday morning in New York. The stock has gained almost 33 per cent this year through Monday’s close, compared with a 12 per cent increase in the S&P 500 Index. PepsiCo stock declined six per cent over the same period.

Coca-Cola is reaching more shoppers with a widening portfolio of beverages that includes zero-sugar soda and higher-protein Fairlife milk. Coca-Cola has also nabbed some recent wins against rival PepsiCo Inc., including taking over KFC’s United States restaurants.

Looking ahead to 2027, “we expect consumer behaviour to remain largely unchanged, with value being a very important consideration across all markets and income groups,” chief financial officer John Murphy said on the call.

Murphy said the restaurant industry “continues to be under pressure,” so the company was seeing “a stronger business at home versus away from home.”

Braun also said that Topo Chico mineral water is on shelves again in Texas. The glass-bottled sparkling water had been unavailable for months due to supply issues in Mexico. The brand, which has a dedicated fan base, will expand to other areas in 2027, the company said.