Coca-Cola (KO) Stock: Zero Sugar Growth Drives Earnings Beat Despite Volume Decline

TLDR

Table of Contents

Coca-Cola beat Q2 earnings expectations with 87 cents per share versus 83 cents forecast, driven by 6% price increases
Global case volumes declined 1% overall, but Coca-Cola Zero Sugar surged 14% across all regions
Company plans to launch cane sugar-based Coca-Cola product this fall following Trump’s social media claims
Revenue rose 2.5% to $12.62 billion, beating Wall Street estimates of $12.54 billion
Full-year earnings guidance raised to upper end of 2-3% growth range from previous 7-9% target

Coca-Cola delivered a solid second quarter performance, beating earnings expectations even as global beverage volumes took a hit. The Atlanta-based company earned 87 cents per share on an adjusted basis, topping analyst forecasts of 83 cents.

Revenue climbed 2.5% to $12.62 billion for the three months ending June 27. This beat Wall Street’s estimate of $12.54 billion and showed the company’s pricing power remains strong.

The earnings beat came despite a 1% drop in global case volumes. North America also saw volumes fall 1% during the quarter.

Higher prices helped offset the volume decline. Coca-Cola raised prices 6% overall in the second quarter, up from a 5% increase in the prior quarter.

CEO James Quincey highlighted the company’s ability to stay flexible during challenging conditions. “The ability of our system to stay both focused and flexible enabled us to stay on course in the first half of the year,” he said.

Zero Sugar Variant Powers Growth

The standout performer was Coca-Cola Zero Sugar, which saw volumes jump 14%. This growth happened across all geographic regions where the company operates.

Traditional Coca-Cola still dominates sales compared to the zero-sugar version. However, consumer demand for zero-sugar options is growing much faster.

Sports drink volumes dropped 3% as higher North American demand couldn’t make up for Latin American declines. Juice, dairy and plant-based beverages performed even worse with a 4% volume drop.

Latin America proved to be a particular weak spot for the company’s flagship cola brand during the quarter.

Cane Sugar Product Launch

Coca-Cola announced plans to launch a cane sugar-based product this fall. This comes after President Trump claimed last week that the company agreed to use real cane sugar instead of high-fructose corn syrup in its U.S. flagship product.

"I have been speaking to @CocaCola about using REAL Cane Sugar in Coke in the United States, and they have agreed to do so. I’d like to thank all of those in authority at Coca-Cola. This will be a very good move by them — You’ll see. It’s just better!" –President Donald J. Trump pic.twitter.com/9L27oxlYUj
— The White House (@WhiteHouse) July 16, 2025

The company hasn’t confirmed any changes to its main Coca-Cola formula. Instead, it’s planning a separate product under the Coca-Cola trademark that will use cane sugar.

This move aligns with Health Secretary Robert F. Kennedy Jr.’s Make America Healthy Again campaign. Food companies are making ingredient changes to include what they consider healthier substitutes.

Rival PepsiCo has also said it would use sugar in products if consumers demand it. PepsiCo topped its own quarterly earnings estimates last week.

Trade pressures remain manageable for Coca-Cola, according to company statements. The firm said costs from “global trade dynamics” haven’t severely impacted operations since most are local.

Tariffs on aluminum imports have doubled to 50% as of June. Coca-Cola has explored affordable packaging options like plastic bottles to deal with the 25% duty Trump imposed on aluminum imports.

Net income jumped 58% to $3.8 billion for the quarter. The company now expects full-year comparable earnings per share to grow near the top end of its 2% to 3% target range.

Coca-Cola shares were down about 1% in premarket trading Tuesday. The stock has gained 12.5% year-to-date through early trading.

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