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(Reuters) -Coca-Cola Co on Monday topped estimates for first-quarter revenue and profit on resilient demand for its sodas and multiple price increases by the beverages maker to combat higher commodity and shipping costs.
Average selling prices increased 11%, the maker of Fanta and Sprite said, while global unit case volumes rose 3%.
The company’s shares were up about 2% in premarket trading.
Coca-Cola (NYSE:KO) said in February it would raise soda prices further in 2023 “across the world” to combat the stubbornly high costs but at a moderating pace, while rival PepsiCo (NASDAQ:PEP) hit a pause on price hikes.
Consumer goods makers have raised prices to pass on the sharp increases in raw material costs from supply-chain snags fueled by the pandemic and aggravated by the Russia-Ukraine conflict.
Still, Pepsi and Coca-Cola faced little or no pushback from consumers, thanks to their near domination of the global carbonated drinks market.
Average price of 192 ounces of Coca-Cola’s soda in the U.S. rose to $9.30 in 2022 from $8.03 in 2021, according to NielsenIQ’s data. It stood at $10.55 this year, so far.
Coca-Cola’s first-quarter operating margin was 30.7%, compared to 32.5% a year earlier, as price hikes did not fully help offset an impact from higher operating costs, an increase in marketing spending, investments and a stronger dollar.
“With pricing expected to moderate over the course of the year, this should come in tandem with moderating levels of commodity inflation, which should help to protect profitability,” said Wedbush analyst Gerald Pascarelli.
Revenue rose 4.3% to $10.96 billion, beating estimates of $10.80 billion, according to Refinitiv data.
Adjusted earnings came in at 68 cents per share, compared with estimates of 64 cents.
The company, however, maintained its annual forecasts.
