Skip to content
    KO
    Earnings call· Mar 2026(Q1 FY26)

    COCA COLA Q1 FY26 earnings call KO

    Apr 28, 2026 Source

    Executive summary

    The Coca-Cola Company Q1 FY26 — Strong Volume Growth Across All Segments

    The Coca-Cola Company started FY26 with robust performance, achieving strong volume and organic revenue growth despite a complex global environment. The company's focus on consumer-centricity and leveraging digital capabilities drove broad-based growth and share gains. Management remains confident in delivering its updated full-year guidance, emphasizing a balanced growth algorithm and strategic investments.

    Highlights

    5

    • Delivered 3% volume growth across all segments in Q1 FY26.

    • Achieved 10% organic revenue growth in Q1 FY26.

    • Expanded comparable operating margin by approximately 70 basis points in Q1 FY26.

    • Comparable EPS increased 18% year-over-year to $0.86 in Q1 FY26.

    • Gained overall value share for 20 consecutive quarters.

    Concerns

    4

    • Comparable gross margin declined approximately 30 basis points in Q1 FY26 due to commodity pressures and inventory costs.

    • Volume declined in March in Eurasia and the Middle East due to conflict.

    • Profit declined in Asia Pacific driven by commodities, headwinds in tea and coffee, and phasing of inventory costs.

    • Price/mix growth was subdued at 2% in Q1 FY26, impacted by Easter timing, category mix in North America, and geographic mix in Latin America.

    Guidance & targets

    12
    CategoryTargetConfidence
    Organic revenue growth
    4% to 5%
    high materiality
    High
    Comparable currency-neutral earnings per share growth (excluding acquisitions and divestitures)
    6% to 7%
    high materiality
    High
    Divestitures impact on comparable net revenues
    approximate 4-point headwind
    medium materiality
    Medium
    Divestitures impact on comparable earnings per share
    approximate 1 point headwind
    medium materiality
    Medium
    Currency tailwind to comparable net revenues
    approximate 1- to 2-point
    medium materiality
    Medium
    Currency tailwind to comparable earnings per share
    approximate 3-point
    medium materiality
    Medium
    Underlying effective tax rate
    19.9%
    medium materiality
    High
    Comparable earnings per share growth
    8% to 9% versus $3 in 2025
    high materiality
    High
    Calendar shift impact on Q4
    6 fewer days
    low materiality
    High
    Easter shift benefit to Q1 volume
    0.5 point
    low materiality
    High
    Concentrate shipments vs. unit cases
    like unit cases by a couple of points
    low materiality
    Medium
    Coca-Cola Beverages Africa (CCBA) sale closure
    during the second half of 2026
    medium materiality
    Medium

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    North America
    Benefited from cycling an easier comparison. Softness in price/mix attributed to Easter timing, unfavorable category mix from packaged water, and constrained production capacity for Topo Chico and Felli. Trademark Coca-Cola led the industry in retail sales growth.
    Volume growth: grewValue share: gainedVolume share: gained
    		grew——grew
    Latin America
    Volume growth in Brazil and Central America more than offset declines in Mexico and Argentina. Focused on fewer but more impactful initiatives and balancing relevance with scale.
    Volume growth: grewValue share: gained
    		grew——grew
    EMEA
    Europe gained better share despite a cautious consumer environment. Eurasia and the Middle East grew volume for the quarter, but volume declined in March after the onset of conflict. Africa is sharpening revenue management capabilities.
    Volume growth: grew across all operating unitsValue share: gained
    		grew——grew
    Asia Pacific
    Profit declined driven by commodities, headwinds in tea and coffee, and phasing of inventory costs. ASEAN and South Pacific leaned into impactful marketing campaigns. China activated its broad portfolio and stepped up execution. India drove affordability and expanded into rural regions. Japan gained value share.
    Volume growth: grew across all operating unitsValue share: gained
    		grew——declined

    Operational metrics

    14
    Organic revenue growth
    10%
    Q1 FY26

    Excluding the impact from 6 extra days in the quarter and the timing of concentrate shipments, organic revenue growth is on track with full year guidance.

    Unit case growth
    3%
    Q1 FY26

    Grew volume across all segments.

    Concentrate sales vs. unit case sales
    5 points ahead
    Q1 FY26

    Impacted by 6 additional days in the quarter, partially offset by the timing of concentrate shipments.

    Price/mix growth
    2%
    Q1 FY26

    Primarily driven by pricing actions partially offset by unfavorable mix.

    Comparable gross margin
    declined approximately 30 basis pointsYoY
    Q1 FY26

    Stemming primarily from commodity pressures and inventory costs.

    Comparable operating margin
    increased approximately 70 basis pointsYoY
    Q1 FY26

    Realized operating expense efficiencies while investing further behind brands.

    Comparable EPS
    $0.86increased 18% year-over-year
    Q1 FY26

    Helped by currency tailwinds.

    Net debt leverage
    1.6x EBITDA
    Q1 FY26

    Below the targeted range, judiciously managing balance sheet while awaiting a court decision related to IRS dispute.

    Outlet coverage
    added more than 600,000 outlets
    Past year

    Increased outlet coverage through system efforts.

    Off-the-shelf points of interruption
    grew by double digits
    Q1 FY26

    To capture impulse purchase.

    Cold drink equipment placements
    over 340,000 units
    Q1 FY26

    Placed by the system to drive transactions.

    Customer value creation leadership
    leaders for the past 8 years
    Past 8 years

    In the industry.

    APAC juice inventory costs impact on gross margin
    2/3 of the margin compression
    Q1 FY26

    This was a one-off item in the quarter.

    Fairlife Webster capacity alignment
    start to get align
    Q2 FY26

    Capacity is expected to ramp up through the year.

    Industry KPIs

    10
    MetricValueDetails
    Category brand sharegainedvalue share
    EPS organic EPS growth$0.86USD
    Gross operating margindeclined approximately 30 basis points (gross margin) / increased approximately 70 basis points (operating margin)basis points
    Organic revenue growth10%%
    Geographic regional mixvolume growth in Brazil and Central America more than offset declines in Mexico and Argentina
    Unit case volume growth3%%
    Aluminum packaging cost impactmore exposure
    Pack architecture pricing actionsunfavorable mix2 points
    Bottler franchise system economics5 points ahead
    Cold drink equipment distribution reachover 340,000 unitsunits

    Product announcements

    4
    ProductTypeDetails
    Coca-Cola Zero-Zeroroadmap
    Spritelaunch
    Fuze Teaupdate
    Cherry-flavored Coca-Cola products (Coca-Cola Cherry Flow, Diet Coke Cherry, Mr. Peak)expansion

    Deals & partnerships

    1
    Coca-Cola Beverages Africa (CCBA)divestiture

    The pending sale of Coca-Cola Beverages Africa is subject to regulatory approvals and is expected to close in the second half of 2026. This divestiture of a lower-margin bottling business is anticipated to mechanically improve the overall company margin profile.

    Risks & headwinds

    4
    Geopolitical tensions and conflict in the Middle EastQ1 FY26, ongoing

    volume declined in March after the onset of the conflict in Eurasia and the Middle East

    Mitigation: supporting the safety and well-being of our system associates and partnering closely with customers across the region

    Persistent inflation and macroeconomic uncertaintyQ1 FY26, ongoing

    many consumers remain resilient, others are under pressure due to persistent inflation, greater macroeconomic uncertainty

    Mitigation: balancing relevance with scale and more closely integrating our marketing and commercial plan; more granularly focusing on value offerings at attractive absolute price point; dialing up affordability options

    Commodity pressures (tea and coffee)Q1 FY26, continuing somewhat through the year

    comparable gross margin declined approximately 30 basis points, stemming primarily from commodity pressures in our tea and coffee businesses; profit declined in Asia Pacific driven by commodities, headwinds in tea and coffee

    Mitigation: overall impact on our cost basket is manageable at this time; taking a number of measures to somewhat mitigate against some of the commodity pieces

    Fluid cost environment for bottling partners (aluminum, PET)through the year

    bottling partners have more exposure, predicted to aluminum and PET on the back of both the oil price impact and just the overall supply disruptions

    Mitigation: leveraging RGM capabilities, cross-enterprise procurement for resiliency and productivity, and localized cost management playbooks

    Q&A highlights

    7

    Inquired about the balance between volume and price/mix for the rest of the year, especially in North America and Asia, and the sustainability of Q1 unit case growth given Easter timing and affordability focus.

    Henrique Braun stated confidence in a balanced growth algorithm for the full year, with quarterly variations. He emphasized that affordability options are a key part of their RGM strategy, particularly for low-income consumers, and that the company is managing all levers to deliver on updated guidance.

    “What we will continue to see is an algo that will be balanced as we have said in the past that we -- it's not a coincidence that we actually got this in the quarter. We planned ahead of the curve. We invested accordingly.”

    asked by Dara Mohsenian · answered by Henrique Braun

    2 min read7 chapters

    Detailed Narrative

    01

    Global Operating Landscape & Strategy

    Henrique Braun discussed a complex external environment with resilient consumers in some markets and pressure from inflation and geopolitical volatility🌐 in others. The company is operating in an expanding industry, focusing on consumer-centricity, constructive discontent, and digital capabilities to drive balanced growth. This approach aims to leverage the power of its brands and unmatched system reach to deliver consistent performance.

    02

    North America Performance & Innovation

    The North America segment delivered solid performance, achieving volume and value share gains, alongside growth in revenue and profit. Innovation played a significant role, particularly with cherry-flavored Coca-Cola products like Coca-Cola Cherry Flow and Diet Coke Cherry, as well as the expansion of Minicans into convenience retail. The softness in price/mix was attributed to Easter timing and an unfavorable category mix.

    03

    EMEA & Asia Pacific Dynamics

    EMEA demonstrated strong performance with value share gains and volume growth across all operating units, including Europe despite a cautious consumer environment. However, Eurasia and the Middle East experienced a volume decline in March following the onset of conflict. In Asia Pacific, volume grew across all units, but profit declined due to commodity headwinds in tea and coffee, coupled with the phasing📎 of inventory costs.

    04

    Consumer-Centricity & Digital Capabilities

    The company is enhancing its consumer and customer-centric approach by applying 'the four eyes' (insight, innovation, intimacy, and integrated execution) and leveraging data and digital capabilities. Examples include the successful relaunch of Coca-Cola Zero-Zero in Europe, targeting evening consumption occasions, and the global Sprite campaign 'It's dead fresh,' which includes localized product launches like Sprite Prebiotic in China.

    05

    Commercial Excellence & System Reach

    Through commercial excellence, the Coca-Cola system added over 600,000 outlets and placed more than 340,000 cold drink units in the past year, significantly increasing outlet coverage and visible inventory. This focus on integrated execution and driving basket incidents has resulted in both volume and value share gains, contributing to an increase in weekly drinkers.

    06

    Gross Margin & Cost Management

    Comparable gross margin declined by approximately 30 basis points in Q1, primarily due to an anomalous inventory item in APAC and ongoing commodity pressures in tea and coffee. Management, however, views the overall impact on the cost basket as manageable for the full year, relying on revenue growth management (RGM) capabilities and cross-enterprise procurement to drive efficiencies and mitigate cost pressures.

    07

    Mexico Market & Sugar Tax Impact

    Mexico experienced volume declines at the beginning of the year due to the sugar tax, which contributed to a negative geographic mix effect in Latin America's overall price/mix. Despite this, the system is leveraging its strong resilience and RGM capabilities, along with local and global brands, to engage consumers and mitigate the tax's impact, performing better than initially expected.

    AI-generated summary of the company’s earnings call. Not investment advice.