The Coca-Cola Company (KO) Q2 2024 earnings summary

Executive summary

• Q2 2024 delivered strong results with 15% organic revenue growth, 2% unit case growth, and 10% higher operating income, raising both top and bottom line guidance for the year.

• Gross and operating margin expansion was driven by organic revenue growth and refranchising, partially offset by higher commodity costs and increased marketing investments.

• Net operating revenues for Q2 2024 increased 3% year-over-year to $12.36 billion, with strong pricing and volume growth, but significant currency and refranchising headwinds.

• EPS declined 5% to $0.56 (GAAP), but comparable EPS (non-GAAP) grew 7% to $0.84, reflecting significant currency headwinds.

• Continued investment in marketing, innovation, and digital capabilities, including AI-driven tools and global activations.

Financial highlights

• Organic revenues grew 15% year-over-year in Q2, with price/mix up 9% and unit case growth of 2%.

• Q2 2024 net operating revenues: $12.36B (+3% YoY); gross margin: 61.1% (GAAP), 61.4% (non-GAAP); operating margin: 21.3% (GAAP), 32.8% (non-GAAP).

• Comparable EPS reached $0.84, up 7% year-over-year, despite significant currency and refranchising headwinds.

• Free cash flow was $3.3 billion, down $693 million from prior year due to higher taxes, working capital, and capex.

• Net cash from operating activities for six months: $4.1B (down 11% YoY).

Outlook and guidance

• Raised 2024 guidance: organic revenue growth now expected at 9%-10%, comparable currency-neutral EPS growth at 13%-15%.

• Full-year comparable EPS growth expected at 5%-6% versus $2.69 in 2023, with earnings growth weighted toward Q4.

• Currency headwinds expected to impact comparable net revenues by 5–6% and comparable EPS by 8–9% for the year.

• Free cash flow (non-GAAP) projected at $9.2B for 2024, with $11.4B cash from operations and $2.2B in capex.

• Underlying effective tax rate (non-GAAP) estimated at 19.0%.