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    KO
    Earnings call· Dec 2025(Q4 FY25)

    COCA COLA Q4 FY25 earnings call KO

    Feb 10, 2026 Source

    Executive summary

    The Coca-Cola Company Q4 FY25 — Strong Organic Revenue Growth and Leadership Transition

    The Coca-Cola Company delivered solid Q4 FY25 results, marked by strong organic revenue growth and margin expansion, despite navigating a complex external environment. The quarter also saw a significant leadership transition with James Quincey moving to Executive Chairman and Henrique Braun stepping in as CEO. The company remains focused on its all-weather strategy, leveraging portfolio power and investing for future growth, with a commitment to consistent top-line performance and disciplined capital allocation.

    Highlights

    5

    • Organic revenue grew 5% in Q4 FY25.

    • Comparable EPS was up 6% year-over-year to $0.58 in Q4 FY25.

    • Comparable gross margin and comparable operating margin both increased approximately 50 basis points in Q4 FY25.

    • Adjusted free cash flow conversion was 93% in 2025, in line with the long-term target.

    • The company gained value share for the 19th consecutive quarter and added two new billion-dollar brands to its portfolio.

    Concerns

    5

    • Q4 FY25 comparable EPS faced a 5% currency headwind.

    • Q4 FY25 price/mix growth of 1% was negatively impacted by 3 points of unfavorable mix.

    • Volume declined in Europe in Q4 FY25, though it recovered later in the quarter.

    • Revenue and profit declined in Asia Pacific in Q4 FY25 due to softer consumer spending and weaker industry performance.

    • Divestitures are expected to be an approximate 4-point headwind to comparable net revenues and a 1-point headwind to comparable EPS for full year 2026.

    Guidance & targets

    11
    CategoryTargetConfidence
    Organic revenue growth
    4% to 5%
    high materiality
    High
    Comparable currency-neutral earnings per share growth (excluding acquisitions and divestitures)
    5% to 6%
    high materiality
    High
    Comparable earnings per share growth
    7% to 8%
    high materiality
    High
    Free cash flow
    approximately $12.2 billion
    high materiality
    High
    Cash from operations
    approximately $14.4 billion
    medium materiality
    High
    Capital investments
    approximately $2.2 billion
    medium materiality
    High
    Underlying effective tax rate
    20.9%
    medium materiality
    High
    Currency impact on comparable net revenues
    approximate 1 point tailwind
    medium materiality
    High
    Currency impact on comparable earnings per share
    approximate 3-point tailwind
    medium materiality
    High
    Divestitures impact on comparable net revenues
    approximate 4-point headwind
    medium materiality
    High
    Divestitures impact on comparable earnings per share
    approximate 1 point headwind
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    North America
    Delivered strong results despite continued macroeconomic pressure on lower-income consumers. Broad-based strength across the total beverage portfolio, with Trademark Coca-Cola, Sprite Zero, Fresca, Dasani, fairlife, BODYARMOR, and Powerade each growing volume. Innovation contributed with Sprite Chill and Coca Holiday Creamy vanilla.
    Volume growth: StatedValue share: GainedVolume share: Gained
    		———Grew comparable operating income
    Latin America
    Leveraged system capabilities to navigate a challenging external environment, managing to gain value share and grow volume, revenue, and comparable currency-neutral operating income. Focused on refillable packaging, value offerings, and attractive absolute price points.
    Value share: GainedVolume growth: StatedCoca-Cola Zero Sugar performance: StrongSprite Zero Sugar performance: StrongSanta Clara (dairy brand in Mexico): Became a billion-dollar brand
    		Grew revenue——Grew comparable currency-neutral operating income
    EMEA
    Gained value share and grew volume and revenue. Europe volume declined as the quarter started slowly before recovery. Activated campaigns for holidays and Winter Olympics. Innovations like Sprite Lemon & Mint in the Middle East and impactful marketing campaigns in Africa.
    Value share: GainedVolume growth: StatedEurope volume: Declined then recoveredEurasia and Middle East volume: GrewAfrica volume: Grew
    		Grew revenue———
    Asia Pacific
    Gained value share but had flat volume, with revenue and profit declining. Volume growth in Japan was offset by declines elsewhere, driven by softer consumer spending, weaker industry performance, and cycling strong prior-year growth. Continuing to invest in long-term growth opportunities and implementing granular channel execution plans.
    Value share: GainedVolume growth: FlatJapan volume growth: Stated
    		Declined revenue——Declined profit

    Operational metrics

    14
    Comparable gross margin expansion
    50
    Q4 FY25

    Increased approximately 50 basis points in Q4 FY25.

    Comparable operating margin expansion
    50
    Q4 FY25

    Increased approximately 50 basis points in Q4 FY25.

    Adjusted free cash flow conversion
    93
    FY25

    In line with the long-term targeted range for the third consecutive year.

    Net debt leverage
    1.6x
    FY25

    Below the targeted range of 2x to 2.5x.

    Dividend growth streak
    63
    Current

    The company has grown its dividend for 63 consecutive years.

    Capital investment split
    25
    FY26

    Approximately 25% of expected 2026 capital investment relates to company-owned bottlers, with the remaining primarily growth-oriented.

    Billion-dollar brands
    322 added in 2025
    FY25

    Total number of billion-dollar brands, with 2 new additions (Santa Clara, fairlife) in 2025.

    Trademark Coca-Cola retail sales growth
    over $60 billion
    Since 2017

    Retail sales growth for Trademark Coca-Cola since 2017.

    Volume decline frequency
    once
    Past 50 years

    Annual volume declined only once in the past 50 years, during the pandemic.

    Concentrate sales growth
    3ahead of unit cases
    Q4 FY25

    Concentrate sales grew 3 points ahead of unit cases, driven primarily by timing of shipments and an extra day.

    Price/mix growth
    1
    Q4 FY25

    Price/mix growth was 1%, primarily driven by 4 points of pricing actions, offset by 3 points of unfavorable mix.

    Q1 FY26 calendar shift impact
    6
    Q1 FY26

    Due to a calendar shift, Q1 FY26 will have 6 additional days, with approximately half the benefit offset by concentrate shipment cycling and timing.

    Q4 FY26 calendar shift impact
    6
    Q4 FY26

    The fourth quarter of 2026 will have 6 fewer days.

    Lost equity income
    Stated
    FY26

    Lost equity income due to divesting interest in Coca-Cola Consolidated in November 2025.

    Industry KPIs

    9
    MetricValueDetails
    Category brand shareGainedvalue share
    EPS organic EPS growth$0.58USD
    Gross operating margin50bps
    Organic revenue growth5%
    Geographic regional mixVaries by region
    Unit case volume growth1%
    Pack architecture pricing actionsFocused on attractive absolute price points and value offerings
    Bottler franchise system economicsBetter than ever
    Cold drink equipment distribution reachAccelerated placement

    Product announcements

    4
    ProductTypeDetails
    Sprite Chilllaunch
    Coca Holiday Creamy vanillalaunch
    Sprite Lemon & Mintlaunch
    Santa Claramilestone

    Deals & partnerships

    3
    Coca-Cola Beverages Africadivestiture

    Pending sale of the company's interest in Coca-Cola Beverages Africa, subject to regulatory approvals.

    Chidivestiture

    Divestiture of Chi, which comprised juice and value-added dairy finished product operations in Nigeria.

    Coca-Cola Consolidateddivestiture

    Divestiture of the company's interest in Coca-Cola Consolidated in November 2025.

    Capital programs

    2
    Capital investments for concentrate and finished goods businessesunderway
    Period spend: $2.2 billion

    Benefit: Building capacity for concentrate and finished goods businesses

    Approximately $2.2 billion in capital investments for 2026, with the majority being growth-oriented, including building capacity for concentrate and finished goods businesses.

    New lines in Indiaunderway

    Benefit: Unprecedented level of investment in new lines

    The company and its bottling partners have been investing an unprecedented level in new lines in India over the past few quarters to build the industry for the future.

    Risks & headwinds

    9
    Complex external environment2025

    Stated

    Mitigation: Leveraging portfolio power and adapting faster through the 'all-weather strategy'.

    Macroeconomic pressure on lower-income consumersQ4 FY25 and ongoing

    Stated

    Mitigation: Accelerating cold drink equipment placement, expanding availability of value offerings, and winning share of visible inventory.

    Unfavorable mixQ4 FY25

    3 points negative impact on Q4 FY25 price/mix

    Mitigation: Considered a one-off due to an unusual combination of business mix, category mix, and timing of items; expected to normalize over a 4-quarter view.

    Currency headwindsQ4 FY25

    5% headwind to Q4 FY25 comparable EPS

    Mitigation: Hedging program to manage fluctuations and provide clarity for enterprise-level U.S. dollar earnings growth.

    Softer consumer spending and weaker industry performanceQ4 FY25 and ongoing

    Led to flat volume and declining revenue and profit in Asia Pacific in Q4 FY25

    Mitigation: Implementing granular channel execution plans and tailoring brand price pack architecture with a focus on attractive absolute price points and value offerings.

    Mexico excise taxBeginning of 2026

    Headwind

    Mitigation: Leveraging RGM foundations, applying learnings from past tax increases, and activating campaigns around the World Cup and 100-year system anniversary.

    Volatility in certain commodities and evolving global trade dynamicsFY26

    Manageable impact on cost basket

    Mitigation: Expected to be manageable, with ongoing focus on efficiency and effectiveness initiatives.

    IRS tax case outcomeEnd of 2026, early 2027

    Significant milestone expected

    Mitigation: Maintaining flexibility and optionality in capital allocation to manage potential outcomes.

    SNAP changes in the U.S.Ongoing

    Manageable impact

    Mitigation: Focus on offering brands, beverages, pack sizes, and price points that meet consumer preferences, allowing them to choose how to spend disposable income.

    Q&A highlights

    7

    Asked for perspective on the balance between price/mix and volume in the 4% to 5% organic sales growth outlook for 2026, especially given Q4's unfavorable mix and potential volume drags like Mexico taxes.

    Management clarified that Q4's 1% price/mix was an anomaly due to 3 points of negative mix, with underlying pricing at 4%. They expect a more balanced mix of volume and price in 2026, aiming for a 50-50 split. Volume growth is expected to build through the year as key markets like India and China recover, and actions are taken to mitigate the Mexico tax headwind.

    “What is important this year is to know that the places that need to get better are the contributors of long-term volume growth.”

    asked by Dara Mohsenian · answered by James Quincey

    2 min read5 chapters

    Detailed Narrative

    01

    Leadership Transition and Strategic Vision

    James Quincey concluded his tenure as CEO, reflecting on a decade of growth including adding $12 billion brands and achieving 7% average organic revenue growth since 2017. He transitions to Executive Chairman, while Henrique Braun assumes the CEO role. Braun emphasized continuity with a focus on evolving the culture and enterprise for a new decade of growth, aiming to increase the number of billion-dollar brands and scale existing ones.

    02

    Q4 FY25 Performance Overview

    The company delivered 5% organic revenue growth in Q4 FY25, with unit case growth of 1%. Concentrate sales grew 3 points ahead of unit cases due to timing and an extra day. Price/mix growth was 1%, driven by 4 points of pricing actions offset by 3 points of unfavorable mix from business, category, and timing factors. Comparable gross and operating margins both expanded by approximately 50 basis points, contributing to a 6% comparable EPS increase to $0.58 despite currency headwinds🌐.

    03

    Geographic Performance and Market Dynamics

    North America delivered strong results, gaining volume and value share across its portfolio, including Trademark Coca-Cola, fairlife, and BODYARMOR. Latin America gained value share and grew volume and revenue, leveraging RGM capabilities to navigate challenges. EMEA also saw value share gains and volume/revenue growth, though Europe experienced initial volume declines. Asia Pacific faced softer consumer spending and industry weakness🌐, resulting in flat volume and declining revenue and profit, with Japan's growth offset by other markets.

    04

    Innovation and Portfolio Expansion

    Innovation contributed to growth with new products like Sprite Chill and Coca Holiday Creamy vanilla in North America, and Sprite Lemon & Mint in the Middle East. The company added Santa Clara (Mexico) and fairlife to its billion-dollar brand portfolio, now totaling 32 brands, with 75% outside sparkling soft drinks. Henrique Braun highlighted the need to improve speed to market and better anticipate growth opportunities, focusing on local insights to develop future billion-dollar brands.

    05

    Financial Strength and Capital Allocation

    The company generated $11.4 billion in free cash flow in 2025 (excluding fairlife contingent consideration), with a 93% adjusted free cash flow conversion. Net debt leverage stood at 1.6x EBITDA, below the target range. Capital allocation prioritizes reinvestment in the business, growing the dividend (63-year track record), and opportunistic share repurchases. Approximately 25% of 2026 capital investments are for company-owned bottlers, with the remainder growth-oriented.

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