Coca-Cola's Sales Surge As It Braces For Delta Variant Hit

Coca-Cola Co.'s sales outperformed expectations in the second quarter of the year, leading the soda maker to raise its revenue forecast for the year as it saw a significant bounce back in its business.

The company's performance is a sharp contrast to last year's diminished sales as a result of pandemic-induced lockdowns.

In a statement released on Wednesday, Coca-Cola disclosed that its organic revenue, which excludes the impact of currency or acquisitions, climbed 37% in the quarter ended July 2. Earnings per share also rose to 68 cents in the same period.

“Our results in the second quarter show how our business is rebounding faster than the overall economic recovery,” Chief Executive Officer James Quincey said in the statement. The company, in particular, cited a rebound in “away-from-home channels” as pandemic restrictions eased, sending sales above 2019 levels.

The Atlanta-based company will rely on its pandemic-tested strategy of focusing on bigger brands and doubling down on its supply chain to combat a potential impact from the Delta variant of the coronavirus.

With some parts of the world impacted by low vaccination rates and new strains of the virus, Coke said that although its global unit case volume was benefiting from the recovery in many markets, the improvement was offset by a resurgence of the virus in several areas. Unit case volume grew 18% overall, climbing 17% in North America and 21% in Europe, Middle East, and the African region.

Surging infections from Australia to the United States have brought back lockdowns and other restrictions in some regions, raising fears over the pace of the economic recovery and rattling stock markets earlier this week.

The company raised its forecast for full-year organic sales growth to a range of 12% to 14%, from a prior expectation of high single digits. Comparable earnings per share could rise as much as 15%, Coke said, up from a prior outlook of no more than low double digits.

Coca-Cola has streamlined its product range over the past year to ease the fallout from the pandemic. The company, which owns brands such as Sprite, Fanta, and Dasani, has discontinued its TaB diet soda and Coca-Cola Energy brands in the United States and sold its ZICO coconut water brand.

The company is particularly vulnerable to the closing of theaters, restaurants, and stadiums, unlike rival Pepsi Co. that relies more on grocery and retail channels.