Coca-Cola Reports Weaker Quarterly Earnings in Fourth Quarter 2025 Greenbrae California

Segment Performance

Coca-Cola’s sparkling soft drinks segment accounted for $7.05 billion of the total revenue, an increase of 2.3% year-over-year. The company attributed the rise to seasonal product promotions and limited edition packaging in North America.

Non-carbonated beverages, including bottled water, teas, and ready-to-drink coffee products, contributed $4.77 billion to the quarter’s revenue. Growth in this segment was offset by lower sales in emerging markets, partially due to local economic slowdowns and regulatory restrictions on sugary beverages.

Operating expenses rose 4% to $8.12 billion, driven by higher marketing and distribution costs, particularly in regions with ongoing supply chain constraints. Coca-Cola maintained a global workforce of approximately 86,200 employees as of December 31, 2025, consistent with previous reporting periods.

Geographic Breakdown

In North America, Coca-Cola posted revenue of $5.87 billion, slightly above analysts’ expectations of $5.85 billion. Volume growth in the region was supported by new product launches, including limited-edition flavors and promotional campaigns targeting younger consumers.

Europe, the Middle East, and Africa (EMEA) reported revenue of $3.14 billion, below the projected $3.22 billion. The region faced challenges from rising raw material costs and slower consumption in key markets, including Germany and the United Kingdom.

Asia-Pacific revenue totaled $2.21 billion, falling short of the forecasted $2.34 billion. Economic uncertainty in emerging markets, combined with higher import tariffs and competitive pricing pressures, contributed to the shortfall.

Latin America generated $600 million in revenue, reflecting persistent currency volatility and localized inflation pressures. The company noted that Brazil and Mexico, two of its largest Latin American markets, experienced flat volume growth during the quarter.

Earnings Per Share and Profitability

Adjusted earnings per share (EPS) came in at $0.55, missing the consensus estimate of $0.57. The reported net margin of 20% represents a modest decline compared with 20.4% in the same quarter last year.

Coca-Cola reported $1.2 billion in operating cash flow for the quarter, maintaining liquidity sufficient to support dividend payments and ongoing capital investments. The company declared a quarterly dividend of $0.46 per share, payable on March 15, 2026, to shareholders of record as of February 25, 2026.

Market Response

Following the earnings release, Coca-Cola shares traded at $64.50 per share on the Nasdaq, down 1.8% from the previous close. Analysts cited slower-than-expected international growth as a primary driver of the stock movement.

Several investment firms revised their 12-month price targets for Coca-Cola. JPMorgan reduced its target to $68 per share from $70, while Goldman Sachs maintained a neutral rating with a $67 target. Morgan Stanley emphasized that the company’s brand strength supports long-term stability despite near-term challenges.

Management Commentary

Coca-Cola Chief Executive Officer, Maria Hernandez, stated, “While our fourth-quarter results reflect ongoing pressures in international markets, our strategic initiatives in North America and product innovation continue to drive engagement with consumers.”

Chief Financial Officer, David Lin, added, “Our financial position remains strong. We are managing costs effectively, maintaining cash flow, and investing in areas that will deliver long-term shareholder value.”

The company reaffirmed its full-year 2026 guidance for revenue growth of 3% to 5%, emphasizing that execution in key markets and supply chain optimization will be critical for meeting targets.

Operational Highlights

Coca-Cola continued expansion in ready-to-drink beverages, launching a series of premium coffee products in North America and Europe. Limited edition seasonal offerings contributed to increased foot traffic and brand engagement.

The company also implemented sustainability measures, including packaging reduction and water conservation initiatives, across multiple international facilities. Coca-Cola reported that 78% of its global packaging now comes from recycled or renewable sources, aligning with long-term environmental goals.

Regulatory and Market Developments

In Europe, new sugar taxes impacted several product lines, including sodas and sweetened juices. Compliance costs for labeling and reformulation increased operating expenses by an estimated $45 million during the quarter.

In Asia, tariffs on imported ingredients, particularly fruit concentrates and sweeteners, contributed to pricing pressures in competitive beverage markets. Latin America experienced currency depreciation against the U.S. dollar, negatively affecting reported revenue in dollar terms.

Future Initiatives

Coca-Cola announced plans to expand e-commerce channels and direct-to-consumer sales, particularly in North America and Europe. The company also outlined partnerships with major retailers to enhance in-store availability of both core and new beverage products.

Digital marketing campaigns and social media engagement strategies remain a priority to maintain brand visibility among younger demographics. Coca-Cola plans additional product innovation and promotional campaigns in the second quarter of 2026, including seasonal beverage launches.

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Coca-Cola’s fourth-quarter 2026 earnings fell below analyst expectations, with adjusted revenue of $11.82 billion and EPS of $0.55. North American sales showed resilience, while international markets in EMEA, Asia-Pacific, and Latin America experienced slower growth.

The company declared a quarterly dividend of $0.46 per share, payable on March 15, 2026. Management confirmed ongoing investment in product innovation, supply chain efficiency, and sustainability initiatives.