Price/Mix Contribution: Price/mix growth stood at 13% for the quarter, driven by inflationary pricing and some favorable mix.
Margins: Comparable gross margin expanded by approximately 130 basis points, partially offset by currency headwinds. Comparable operating margin improved by approximately 60 basis points.
Earnings Per Share (EPS): Comparable EPS grew by 7% year-over-year, facing 9% currency headwinds.
Free Cash Flow: Saw an increase to approximately $160 million.
Impairment Charges: Recorded a $765 million charge related to fairlife and a $760 million noncash impairment charge for BODYARMOR.
Future Guidance
Organic Revenue Growth: Expectation updated to 8% to 9% growth.
Currency-neutral EPS Growth: Anticipated to be 11% to 13%.
Currency Impact: A 4- to 5-point headwind on comparable net revenues and a 7 to 8-point headwind on comparable EPS due to currency devaluation in certain markets.
Effective Tax Rate: Now expected to be 19% for 2024.
Overall EPS Growth: Expected to be 4% to 5% compared to $2.69 in 2023.
Trends, Market Conditions, Sentiment
Consumer Behavior: Noted a slight preference for value and at-home consumption in North America. Consumer confidence in China remains below 2019 levels.
Market Conditions: Asia Pacific showed continued momentum while facing temporary factors impacting India and lower consumer confidence in China. Geopolitical and economic challenges continued to affect the Eurasia and Middle East region. Latin America showed strong performance despite high inflationary conditions in Argentina.
Inflation and Currency Fluctuations: The company is navigating through varied inflationary pressures across different markets with a focused approach on revenue growth management (RGM) and strategic pricing actions.
Innovation and Growth Strategy: Emphasis on leveraging the total beverage portfolio for growth, notable success with innovations like Coke Creations and revamped recipes for Fanta and Sprite.
Investor Sentiment: Positive regarding the company’s agility in managing diverse market conditions and confidence in achieving updated guidance for the year.
Notable Quotes
James Quincey: “We’re off to a good start this year…our powerful portfolio, coupled with our systems capabilities, equip us with the agility we need to deliver on our 2024 guidance.”
John Murphy: “Our first quarter results marked a continuation of the underlying momentum in our business, driven by a strong and focused system.”
On BODYARMOR Strategy: “We believe in the power of our 2 sports brand strategy with POWERADE and BODYARMOR…taking actions to help create long-term value.”
On Market Execution: “Across the world, we’re continuing to win in the market by leveraging our scale and relying on our local expertise of our bottling partners.”
On Guidance: “We’re confident our business model has the flexibility to allow us to deliver on our overall objectives.”
