Beverage company Coca-Cola (NYSE:KO) reported Q1 CY2025 results exceeding the market’s revenue expectations , but sales were flat year on year at $11.22 billion. Its non-GAAP profit of $0.73 per share was 1.4% above analysts’ consensus estimates.
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Revenue: $11.22 billion vs analyst estimates of $11.15 billion (flat year on year, 0.6% beat)
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Adjusted EPS: $0.73 vs analyst estimates of $0.72 (1.4% beat)
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Adjusted EBITDA: $4.05 billion vs analyst estimates of $4.06 billion (36.1% margin, in line)
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Operating Margin: 32.6%, up from 19.1% in the same quarter last year
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Free Cash Flow was -$5.51 billion, down from $158 million in the same quarter last year
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Organic Revenue rose 6% year on year (11% in the same quarter last year)
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Sales Volumes rose 2% year on year (1% in the same quarter last year)
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Market Capitalization: $299.3 billion
Coca-Cola’s first quarter results were shaped by region-specific demand shifts, ongoing margin expansion, and targeted investments in brand relevance. CEO James Quincey pointed to volume growth across global beverage categories, but acknowledged challenges in North America and Mexico, particularly among Hispanic consumers, where weaker sentiment and a misleading viral video weighed on flagship brand performance. The company emphasized agility in responding to market-specific headwinds, with bright spots in products like Coca-Cola Zero Sugar and Fairlife.
Looking ahead, management reiterated its confidence in the company’s strategy as it navigates uneven consumer trends and macroeconomic uncertainty. The outlook is supported by Coca-Cola’s focus on affordability, local production, and continued innovation, including the return of the Share a Coke campaign and expansion in functional beverages. CFO John Murphy noted, “We are being prudent to not get flow through” on currency guidance and remain committed to long-term growth targets, while preparing for potentially choppy conditions in coming quarters.
Coca-Cola’s management attributed the quarter’s results to a mix of geographic and product-specific dynamics, with particular attention to regional consumer sentiment and brand performance outside core markets. Deviation from consensus expectations came mainly from stronger-than-expected operating margin expansion, driven by cost management, and continued focus on local execution rather than headline growth rates.
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North America softness: The company cited weakening consumer sentiment, especially among Hispanic consumers, and the impact of a false viral video affecting Coca-Cola Original sales in Southern states. Management responded by increasing focus on affordability options and tailored promotions.
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Mexico volume pressures: Softer performance in Mexico was attributed to cycling strong growth in the prior year, calendar shifts, and macro uncertainty following local elections. The company launched the Hecho en Mexico campaign and emphasized value packaging to regain momentum.
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Asia-Pacific and India growth: Volume gains in Asia-Pacific were led by strong execution in India and a recovery in China, where marketing activations during Lunar New Year and portfolio rationalization helped drive demand.
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Fairlife’s continued expansion: Fairlife remained the leading contributor to retail dollar growth in the beverage industry. Management expects growth to moderate as the brand’s size increases, with new production capacity scheduled to come online later in the year.
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Margin improvement levers: Operating margin expansion was supported by productivity initiatives, bottler refranchising, and targeted cost management. Management noted some timing benefits in the quarter but reiterated a focus on sustainable long-term margin gains.
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