CocaCola NYSE: KO executives pointed to a “good start” to 2026 as the company posted first-quarter results marked by volume growth across all operating segments, continued value share gains, and double-digit comparable earnings per share growth, despite what CEO Henrique Braun described as a “complex external environment.”
First-quarter performance: volume gains, share momentum, and a balanced growth focus
Braun said the company delivered 3% volume growth and extended its “streak of gaining overall value share for the past 20 consecutive quarters.” He added that, excluding the impact of “six extra days in the quarter and the timing of concentrate shipments,” organic revenue growth remained on track with full-year guidance.
President and CFO John Murphy said Coca-Cola grew organic revenues 10% in the quarter, with unit case volume up 3%. Concentrate sales rose faster than unit cases, increasing 5 percentage points above unit case performance, which Murphy attributed to the six additional days in the quarter, “partially offset by the timing of concentrate shipments.”
Murphy said price/mix increased 2%, driven by “approximately 4 points of pricing actions,” partially offset by “2 points of unfavorable mix.” He cited three drivers of the mix pressure: Easter timing and category mix in North America; stronger growth of value offerings tied to revenue growth management initiatives in Asia-Pacific; and geographic mix in Latin America.
Margins, cash flow, and balance sheet positioning
On profitability, Murphy said comparable gross margin declined about 30 basis points, primarily due to commodity pressures in tea and coffee, phasing of inventory costs, and the timing of trade spend. Comparable operating margin increased about 70 basis points, which Murphy attributed to operating expense efficiencies while “investing further behind our brands.”
Murphy also pointed to “higher equity income, lower net interest expense, and realized security gains in our captive insurance companies,” which benefited comparable other income.
Comparable EPS was $0.86, up 18% year-over-year, helped by “3% currency tailwinds,” Murphy said. Free cash flow was approximately $1.8 billion, up versus the prior year. Murphy noted the company’s net debt leverage was 1.6x EBITDA, below its targeted range of 2x to 2.5x, and said Coca-Cola is “continuing to judiciously manage” the balance sheet as it awaits a court decision related to an ongoing IRS dispute.
Regional highlights: North America strength, EMEA resilience, and Asia-Pacific profit pressure
In North America, Braun said Coca-Cola “delivered solid performance,” gaining both volume and value share and growing “volume, revenue, and profit.” He said softness in price/mix reflected Easter timing, along with “unfavorable category mix from packaged water” and “constrained production capacity for Topo Chico and fairlife.” Braun said multiple brands grew volume, including Trademark Coca-Cola, Fanta, Fresca, BODYARMOR, Powerade, Dasani, smartwater, and Minute Maid, and added that Trademark Coca-Cola “led the industry in retail sales growth.”
Braun also cited innovation as a contributor to revenue growth, referencing cherry-focused offerings including Coca-Cola Cherry Float, Diet Coke Cherry, and Mr. Pibb, as well as Powerade Power Water and expansion of mini cans into convenience retail.
In Latin America, Braun said the company gained value share and grew volume, revenue, and profit, with growth in Brazil and Central America more than offsetting declines in Mexico and Argentina. Discussing Mexico later in the call, Braun said a sugar tax introduced at the beginning of the year had an impact, but he said the system’s experience and revenue growth management capabilities helped performance come in “better than we expected.”
In EMEA, Braun said Coca-Cola gained value share and grew volume “across all operating units,” while also growing revenue and profit. He said the company saw volume decline in March in the Middle East after the onset of the conflict, even though volume grew for the quarter overall. Braun said the company’s “top priority is supporting the safety and well-being of our system associates and partnering closely with customers across the region.” In Europe, he said Coca-Cola emphasized campaigns tied to meals and value offerings at “attractive absolute price points.”
In Asia Pacific, Braun said volume grew across all operating units and revenue increased, but profit declined due to “commodities, headwinds in tea and coffee, and phasing of inventory costs.” Murphy later characterized first-quarter gross margin performance as “somewhat anomalous,” citing “the phasing of juice inventory costs, particularly in China,” calling it “a one-off in the quarter.” He added that tea and coffee commodity pressures would continue “somewhat through the year,” but said the company does not expect “a big deviation” from its margin playbook when that inventory issue is excluded.
Consumer-centric execution and the “four I’s” strategy
Braun reiterated a push to be more consumer- and customer-centric through the “four I’s”—Insights, Innovation, Intimacy, and Integrated execution—supported by data and digital capabilities. He highlighted the relaunch of Coca-Cola Zero Zero in parts of Europe, saying it was informed by insight that many adult drinkers monitor caffeine intake in the evening. Braun said the product saw strong trial and repeat rates and supported Trademark Coca-Cola volume growth in Europe.
He also pointed to Sprite’s global “It’s That Fresh” campaign and product tailoring across markets, including Sprite Prebiotic in China and Ramadan activations in the Middle East. Braun said Fuze Tea grew volume double digits globally and emphasized localized flavor offerings in markets like Turkey.
On commercial execution, Braun said the system added more than 600,000 outlets over the past year, grew off-the-shelf points of interruption by double digits, and placed over 340,000 units of cold drink equipment. He said the company has been an industry leader in customer value creation for the past eight years.
Updated 2026 guidance: EPS outlook raised on lower tax rate
Murphy said Coca-Cola remains on track to deliver its updated 2026 guidance, including organic revenue growth of 4% to 5%. The company now expects comparable currency-neutral EPS growth (excluding acquisitions and divestitures) of 6% to 7%.
He said divestitures are expected to be an “approximate 4-point headwind” to comparable net revenues and an “approximate 1-point headwind” to comparable EPS, assuming the pending sale of Coca-Cola Beverages Africa—subject to regulatory approvals—closes in the second half of 2026.
On currency, Murphy said the company now anticipates an approximately 1- to 2-point tailwind to comparable net revenues, up from the prior estimate of about a 1-point tailwind. Coca-Cola continues to expect an approximately 3-point currency tailwind to comparable EPS for full-year 2026.
Murphy said the underlying effective tax rate for 2026 is now expected to be 19.9%, a 1-point reduction from the prior estimate. As a result, Coca-Cola now expects comparable EPS growth of 8% to 9% versus $3 in 2025, up from its prior expectation of 7% to 8%.
Murphy also flagged several 2026 timing considerations, including a calendar shift that will leave the fourth quarter with six fewer days than the fourth quarter of 2025, and an estimated half-point first-quarter volume benefit from Easter shifting into the first quarter. He also said concentrate shipments are expected to lag unit cases by “a couple of points” in the second quarter.
In closing remarks, Braun said the company is prioritizing agility and consumer-centric execution amid a dynamic external environment, while continuing to partner closely with customers and bottlers worldwide.
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.
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