Story Stocks^®

Coca-Cola (KO) is modestly lower after reporting its Q4 results this morning. The beverage giant beat EPS expectations, while revenue increased 2.2% yr/yr to $11.8 bln, falling short of estimates. Additionally, for FY26, the company expects organic sales growth of 4-5% and comparable EPS growth of 7-8%, or $3.21-3.24, which was in line with expectations.

• Total volume increased 1%, holding steady relative to Q3, but it marks the second consecutive quarter of volume growth. Management also noted volumes improved each month of the quarter.
• North America volume continued to improve despite pressure on lower income consumers, with volume up 1% after being flat in Q3, driven by broad-based strength across the beverage portfolio.
• EMEA volume increased 2%, moderating from Q3's 4% gain, as the quarter started slowly before recovering as transactions improved, supported by holiday activations and sports-linked marketing.
• Latin America volume increased 2%, a step up from flat in Q3, driven by growth across all global beverage categories. Asia Pacific volume was flat, improving from a 2% decline in Q3, as growth in water, sports, coffee and tea and Coca-Cola was offset by weaker sparkling flavors.
• Coca-Cola Zero Sugar was a standout with volume up 13%, while water rose 4% and sports drinks increased 5%. Offsetting that, juice and value-added dairy declined 3% and sparkling flavors fell 1%.
• Price/mix growth was 1% in Q4, driven by 4 points of pricing actions but offset by 3 points of unfavorable mix. Comparable operating margin expanded 50 bps to 24.4%, reflecting solid cost discipline.
• Incoming CEO Henrique Braun is focused on three priorities: deepening recruitment with young adult consumers, getting closer to the consumer to speed innovation and time-to-market, and embedding digital at the core of the system.

Briefing.com Analyst Insight

KO delivered an encouraging demand read-through this quarter, as volumes stayed positive for a second consecutive quarter and momentum improved as the quarter progressed. Volume trends also broadened, with North America and Latin America returning to growth and Asia Pacific stabilizing. Despite those positives, shares are trading a bit lower, which likely reflects the revenue shortfall after a strong run into the report. That said, the quarter still reinforces KO's defensive profile, with strong cash generation and a long-standing dividend. Incoming CEO Henrique Braun reiterated three priorities, and we look forward to hearing more as he formally steps into the role on March 31. Overall, we think the bigger focus for investors remains on volumes, as KO expects pricing to normalize in 2026, putting more emphasis on how it can support volumes to drive growth rather than leaning on pricing.