Why Coca-Cola earnings more iconic tthan Feds minutes?

$Coca-Cola(KO)$ released Q2 earnings before Tuesday open. As the best representative of consumer staples, it means a lot.

From Q2 earnings, Coca-Cola is convinced no longer an ordinary consumer product. For most consumers, it is a necessary like daily necessities, te Demand elasticity of necessities is quite low, that is, people are extremely insensitive to price changes. An 10% (probably a few cents) price raise will not change any demands.

Very little elasticity

Although Coca-Cola is bearing inflation like others (such as $Wal-Mart(WMT)$ ), it can easily raise its price with sales volume still strong.

For Q2, price/mix metric jumped 12%, with an 11.9% jump in revenue pushed $730M above expectations, bolstered by an 8% jump in case volume.

At the same time, profit indicators are also higher than expected. Although the gross profit margin decreased from 61.4% in the same period last year to 59% due to more expensive raw materials (such as bottles), it was also slightly higher than the market expectation. The diluted EPS is 0.7 USD, which is higher than the market expectation consensus of 0.64 USD.

It is worth mentioning that Coca-Cola's withdrawl from the Russian market in March. Although there may be some finishing work to be done in Q2, it is obvious that the overall sales impact is not great.

Geographically,The income growth rate of Europe, Africa and the Middle East was 8.1%, ranking second among the four major regions, and beat market estimates. However, the company expects the impact on EPS to be about 0.03 US dollars.

The biggest impact on Coca-Cola should be the forex, which gives Q2 a -6% headwind. But more importantly, the company is still very optimistic about the performance in the second half of the year, so it raised the annual performance guidelines, and the growth rate of organic income was raised from 7-8% to 12-13%, and the growth rate of EPS was also raised to 5-6%.

In a word, Coca-Cola's users are too sticky, almost becoming a necessity, and its price elasticity is very low.

Of course, although inflation is high in the United States at present, the overall salary level is still not low, which is why consumer goods can still maintain strong purchasing power. If Coca-Cola's performance has declined, it may be that the recession has really started.

voteAre you sensitive to the price of Coke(Single choice)
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# Earning Season

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  • Great article! I would like to share it.
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  • However, some of them unfortunately decided recently on thinking abog can ut reducing their consumption due to its increasinit’s gonna affect No 1 drink’s global sales volume at the end of the day.
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  • Totally agree on the excellent analysis. A few of my friends can be thought as long-term Coca-Cola customers or even life-time consumers of the No 1 manmade drink in the world.
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  • Tangen
    ·08-03
    Great article! I would like to share it.
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  • Coke's earnings

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  • Great article! I would like to share it.
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  • bwjx
    ·08-01
    Thanks. A bit overpriced for now. Will wait for retracement to add into portfolio.
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  • lucash
    ·07-31
    great read, thanks!
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  • RT126
    ·07-29
    Good stock = No fear
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  • andy1967
    ·07-29
    Consumer staple stock can sustain for a longer term.
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  • jimstocker
    ·07-29
    Nice to know about it. thanks
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  • jat
    ·07-29
    consumer pdts long established and became part of life style... the price increase usually is insignificant ie usually it goes by  couple of "cents"...
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  • HelenJanet
    ·07-29
    Thanks for sharing that Coca-Cola is more like a necessities and an 10% price raise will not chnage any demand. 👍😊
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  • Feijoa8025
    ·07-29
    Intersting readin !
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    • Chiweii
      🤜🤛
      07-30
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  • xuero
    ·07-29
    good or bad days, people still drink Coca-Cola [Happy]
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  • sbikeken
    ·07-29
    從來都沒有看過那麼厲害的PO文!
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  • max31415
    ·07-29
    Thanks for sharing!
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  • Very interesting article! Thanks for sharing the information, much appreciated. [Happy] 👍
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  • Aqaz
    ·07-29
    Coca-cola is a total beverage company, offering more than 200 brands. Buy it for dividend. It is a very strong company. It will never collapse. Long live Coca-cola.[Heart][Heart][Heart][Heart][Heart]
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  • Kenny77
    ·07-29

    Good news 

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