CocaCola (NYSE:KO) reported second-quarter results that management said reflected broad-based global momentum, with unit case volume rising 5%, organic revenue increasing 6%, and comparable earnings per share growing 11% to $0.97.
Chief Executive Officer Henrique Braun said the quarter benefited from favorable weather in some markets, FIFA World Cup marketing activation and an easier comparison with the prior year. On a two-year basis, volume growth averaged 2%, which management said was more consistent with recent trends.
Margins Expand as Revenue Growth Management Continues
President and Chief Financial Officer John Murphy said second-quarter price/mix increased 2%, reflecting 3 percentage points of pricing actions partly offset by 1 point of unfavorable mix. The unfavorable mix was primarily related to the timing of investments, especially in Asia-Pacific.
Comparable gross margin rose about 120 basis points, while comparable operating margin increased about 90 basis points. Murphy attributed the gains to underlying margin expansion and currency tailwinds, while noting the company continued to invest in brands and use revenue growth management tools to offer consumers appropriate package sizes, brands and price points.
Free cash flow totaled approximately $6.9 billion, up from the prior year. The company ended the quarter with net debt leverage of 1.4 times EBITDA, below its target range of 2 times to 2.5 times. Murphy said the balance sheet gives the company more flexibility to reinvest in the business and return capital to shareowners.
- Unit case volume increased 5% in the second quarter.
- Organic revenue increased 6%.
- Comparable EPS rose 11% to $0.97, including a 2-point benefit from currency tailwinds.
- Comparable gross margin increased about 120 basis points.
- Comparable operating margin increased about 90 basis points.
FIFA World Cup Activation Supports Brand Growth
Braun described the 2026 FIFA World Cup campaign as an example of the company’s effort to become more consumer-centric through consumer insights, innovation, local-market intimacy and integrated execution. The system activated across more than 180 markets and 20 million retail outlets, distributing more than 1 billion Panini player stickers in more than 40 markets.
The company said its beverages achieved average incidence of more than 80% at venues across 16 host cities, a record for a FIFA World Cup activation. It also collected more than 25 million first-party data points and generated more than 9 billion views through digital and social media activity.
Trademark Coca-Cola volume rose 5% during the quarter, its strongest volume growth in 17 years excluding the COVID recovery period, according to Braun. POWERADE global volume rose 8%.
Management did not quantify the World Cup’s direct impact on results, but Braun said the event contributed to growth because the company and its bottling system were prepared with product availability, packaging formats and localized activation.
Regional Results Show Uneven Consumer Conditions
Braun said consumer conditions remain uneven globally, with lower-income consumers continuing to face pressure from inflation, geopolitical uncertainty and economic challenges. The company plans to continue using affordability and premiumization strategies to address different consumer needs.
In North America, Coca-Cola gained value and volume share and grew revenue and profit. Volume rose 3%, supported by brands including Coca-Cola, fairlife, POWERADE, Fresca, Gold Peak, smartwater and Simply. The company said its newly relaunched Mr. Pibb grew volume by more than 20%.
Latin America also gained value and volume share, with balanced top-line growth and higher profit. Management said Mexico remained difficult, while conditions improved in Brazil.
In Europe, the Middle East and Africa, the company gained value and volume share. Unit case volume grew in each operating unit in EMEA, although profit declined due to the phasing of investments. Braun said geopolitical conflicts continued to disrupt the Middle East.
Asia-Pacific volume grew across all operating units and nearly all beverage categories, but comparable operating income declined as the company invested to broaden its consumer base. In India, Braun said the company is investing in affordability, cold-drink equipment and revenue growth management capabilities while also pursuing premiumization opportunities.
Fairlife, CCBA Sale and Tax Dispute
Murphy said most production operations at fairlife’s four U.S. facilities have resumed following a recent incident, with retail availability largely unaffected. He said there was no second-quarter impact and that management does not expect a material impact in the second half. The Webster facility is expected to continue ramping capacity through the remainder of the year, with the company prioritizing availability of core products before introducing additional innovation.
The company expects divestitures to create a 2% to 3% headwind to comparable net revenue and about a 1% headwind to comparable EPS, assuming the pending sale of Coca-Cola Beverages Africa closes near the end of the third quarter or during the fourth quarter, subject to regulatory approvals. Management expects the refranchising of CCBA to benefit fourth-quarter growth and operating margin.
Murphy also addressed the company’s dispute with the Internal Revenue Service. Coca-Cola presented oral arguments before the Eleventh Circuit Court of Appeals at the end of June and is awaiting a decision. Murphy said the company continues to believe it will prevail on appeal, while noting that the timing of a ruling remains uncertain and could be six to 12 months away.
For the remainder of 2026, the company expects concentrate shipments to lag unit case volume by 1 point in the third quarter and to slightly trail volume for the full year. Management also noted that the fourth quarter will have six fewer days than the same period in 2025 because of a calendar shift.
About CocaCola (NYSE:KO)
The Coca?Cola Company (NYSE: KO) is a global beverage manufacturer, marketer and distributor best known for its flagship Coca?Cola soda. Headquartered in Atlanta, Georgia, the company develops and sells concentrates, syrups and finished beverages across a broad portfolio of brands. Its product range spans sparkling soft drinks, bottled water, sports drinks, juices, ready?to?drink teas and coffees, and other still beverages, marketed under both global and regional brand names.
Coca?Cola’s brand portfolio includes widely recognized names such as Coca?Cola, Diet Coke, Coca?Cola Zero Sugar, Sprite, Fanta, Minute Maid, Powerade and Dasani, and in recent years the company has expanded into the coffee and premium beverage categories through acquisitions such as Costa Coffee.
