Coca-Cola Company (NYSE:KO) stock fell on Tuesday after the beverage giant delivered a mixed quarterly update, beating profit expectations while falling short on revenue.
The company pointed to steady organic growth and pricing gains, while weaker reported margins and a cautious outlook kept investors on edge.
Quarterly Metrics
The company reported fourth-quarter adjusted earnings per share of 58 cents, beating the analyst consensus estimate of 56 cents. Quarterly sales of $11.80 billion (+2% year over year) missed the Street view of $12.026 billion.
Coca-Cola said organic revenue rose 5%, driven by 4% growth in concentrate sales and 1% improvement in price/mix.
The organic growth was led by Latin America (+10%), EMEA (+6%), and North America (+5%), while Asia Pacific was flat and Bottling Investments fell 1%.
Concentrate sales ran 3 points ahead of unit case volume due to shipment timing and one extra day in the period.
Unit case volume rose 1% overall, with gains in EMEA (+2%) and Latin America (+2%), offset by a 6% decline in Bottling Investments.
Price/mix grew 1% for the quarter, driven by pricing actions in the marketplace, partially offset by unfavorable mix.
For the quarter, operating income declined 32%, while operating margin fell to 15.6% from 23.5% a year earlier. Adjusted operating margin edged up to 24.4% from 24.0%.
Adjusted gross margin expanded to 60.96% from 59.74% a year ago.
For the full year, Coca-Cola reported $7.4 billion in cash flow from operations and $5.3 billion in free cash flow (non-GAAP), reflecting a $6.1 billion Fairlife contingent consideration payment. Excluding that payment, free cash flow (non-GAAP) was $11.4 billion.
Capital Allocation Update
Coca-Cola continued to invest in its various lines of business and spent $2.1 billion on capital expenditures in 2025, an increase of 2% versus the prior year.
The company expects to generate free cash flow (non-GAAP) of approximately $12.2 billion in 2026.
This consists of cash flow from operations of approximately $14.4 billion, less capital expenditures of approximately $2.2 billion.
Outlook
The company expects to deliver organic revenue (non-GAAP) growth of 4% to 5% in fiscal 2026. Analyst expected 5.01% on average, according to Bloomberg data.
Coca-Cola’s adjusted earnings are expected to grow in a range of 7%-8% this year after growing 9% in 2025.
“We’ve taken what we think is a realistic, but prudent, approach relative to a number of international markets [where] we need to see improve through the course of 2026,” CEO James Quincey told Yahoo Finance.
Coca-Cola forecasts fiscal 2026 adjusted EPS of $3.21 to $3.24, compared with analysts' estimates of $3.23.
Tuesday's release was also the last quarterly update under James Quincey's tenure as CEO. The company’s current chief operating officer, Henrique Braun, is slated to assume the role on March 31.
KO Price Action: Coca-Cola shares were down 1.56% at $76.74 at the time of publication on Tuesday, according to Benzinga Pro data.
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