The Coca-Cola Company KO reported third-quarter 2026 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Comparable earnings per share (EPS) rose 11% year over year to 91 cents, beating the consensus estimate of 87 cents. The improvement was supported by organic revenue growth and favorable currency movements.
Comparable revenues increased 7% year over year to $13.4 billion, surpassing the consensus estimate of $12.9 billion. Global unit case volume grew year over year, driven by broad-based demand across markets. Organic revenues advanced 7%, reflecting higher concentrate sales and improved pricing.
This Zacks Rank #2 (Buy) stock has gained 18.7% in the past six months, outperforming the industry's 11% rally.
KO's Volume Growth and Pricing Trends
In the reported quarter, global unit case volume increased 5%, led by growth in India, China, Mexico and Brazil. Sparkling soft drinks volume rose 5%, with trademark Coca-Cola advancing 5% across all geographic operating segments. Coca-Cola Zero Sugar grew 16%, while Diet Coke/Coca-Cola Light increased 6%.
Sparkling flavors volume improved 3%, driven by gains across Asia Pacific, Latin America and Europe, the Middle East and Africa (EMEA). Juice, value-added dairy and plant-based beverages volume remained flat. Water, sports, coffee and tea volume increased 5%, supported by 8% growth in water. Sports drinks declined 3%, while coffee and tea volumes remained unchanged.
Organic revenue growth was driven by higher concentrate sales and 1% growth in price/mix. Pricing actions were partly offset by unfavorable mix. Concentrate sales outpaced unit case volume by two percentage points due to shipment timing.
Our model expected organic revenue growth of 3.3%, a price/mix rise of 0.3% and unit case volume growth of 2.5%.
CocaCola Company (The) Price and Consensus
CocaCola Company (The) price-consensus-chart | CocaCola Company (The) Quote
KO's Margins and Costs
Comparable gross margin expanded 170 basis points (bps) year over year to 62.7%. Comparable currency-neutral operating income increased 8%, supported by organic revenue growth, partly offset by higher marketing investments and operating expenses. We had anticipated 30 bps gross margin growth to 61.3%
Selling, general and administrative expenses increased 10% to $4 billion. Cost of goods sold rose 3% to $4.9 billion.
Coca-Cola's Regional Revenue Performance
North America revenues increased 3% year over year to $5.4 billion, with organic revenues also rising 3%. Unit case volume remained flat, while price/mix improved 1%. Comparable currency-neutral operating income increased 5%, supported by organic growth and the timing of marketing investments.
Latin America revenues surged 25% to $2 billion, benefiting from a 9% currency tailwind. Organic revenues advanced 16%, supported by 8% concentrate-sales growth and a 7% improvement in price/mix. Unit case volume increased 6%, while comparable currency-neutral operating income rose 14%.
EMEA revenues grew 4% to $3.1 billion, with organic revenues advancing 7%. Unit case volume increased 5%, while comparable currency-neutral operating income improved 7%, aided by organic growth and lower input costs.
Asia Pacific revenues rose 4% to $1.6 billion, while organic revenues improved 6%. Unit case volume increased 6%, although price/mix declined 2%. Bottling Investments revenues grew 13% to $1.5 billion, with organic revenues increasing 12%.
Our model expected reported revenue growth of 4% year over year in North America, 3% in EMEA and 6% in Latin America, and Asia Pacific decline of 1%.
KO Raises 2026 Financial Outlook
For 2026, Coca-Cola now expects organic revenue growth of at least 5% compared with its previous guidance of approximately 5%. Comparable currency-neutral EPS, excluding acquisitions and divestitures, is projected to grow at least 9%, up from the previous expectation of 7-8%.
Comparable EPS is expected to increase at least 11% compared with the earlier forecast of 9-10% growth. The outlook incorporates an approximately 3% currency tailwind and a 1% headwind from acquisitions and divestitures.
Management raised its free cash flow outlook to at least $13 billion from approximately $12.4 billion, reflecting projected operating cash flow of at least $15.2 billion and capital expenditures of approximately $2.2 billion.
For the fourth quarter, Coca-Cola anticipates a 1% currency tailwind and a 4% headwind from acquisitions and divestitures on comparable revenues. Comparable EPS is expected to benefit from a 4% currency tailwind, partly offset by a 3% portfolio-related headwind.
More Stocks to Consider in the Consumer Staples Space
The Chefs' Warehouse, Inc. CHEF, which is a distributor of specialty food products in the United States, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Chefs' Warehouse's current financial-year sales indicates growth of 10.8% from the prior-year level. CHEF delivered a trailing four-quarter earnings surprise of 30.4%, on average.
Utz Brands, Inc. UTZ, which is a leading manufacturer of a diverse portfolio of salty snacks, currently carries a Zacks Rank of 2. UTZ delivered a trailing four-quarter earnings surprise of 1.8%, on average.
The Zacks Consensus Estimate for UTZ’s current financial-year sales indicates a rise of 3.7% from the year-ago number.
Darling Ingredients Inc. DAR, which produces sustainable natural ingredients derived from edible and inedible bio-nutrients, currently carries a Zacks Rank of 2.
The consensus estimate for Darling Ingredients’ current financial-year sales is expected to rise 11.5% from the year-ago reported figure. DAR delivered a trailing four-quarter earnings surprise of 38.9%, on average.
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CocaCola Company (The) (KO): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).