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The Coca-Cola Company KO has reported fourth-quarter 2025 results, with the bottom line surpassing the Zacks Consensus Estimate and the top line missing the same. The company’s revenues and earnings per share (EPS) improved year over year. The results have benefited from a continued business momentum, aided by enhanced pricing across markets. This quarter’s results once again highlight the strength of KO’s resilient, all-weather strategy.
Coca-Cola has reported a comparable EPS of 58 cents in the fourth quarter, up 6% from the year-ago period. Comparable EPS also beat the Zacks Consensus Estimate of 57 cents. Unfavorable currency translations hurt the comparable EPS by 5 percentage points. Comparable currency-neutral earnings per share rose 11% year over year.
Revenues of $11.8 billion grew 2% year over year but missed the Zacks Consensus Estimate of $12.05 billion. Organic revenues rose 5% from the prior-year quarter, led by growth across most segments. Coca-Cola’s reported revenues also benefited from higher concentrate sales and an improved price/mix.
For the fourth quarter of 2025, KO gained a global value share in the total non-alcoholic ready-to-drink beverages category.
Shares of Coca-Cola declined 3.8% in the pre-market trading session following the lower-than-expected sales results in the fourth quarter. The Zacks Rank #3 (Hold) stock has risen 8.9% in the past three months compared with the industry’s 10.7% growth.
In the reported quarter, concentrate sales improved 4% year over year, while the price/mix improved 1%. The price/mix benefited from pricing actions across the marketplace, partly negated by an unfavorable mix.
In the fourth quarter, concentrate sales were 3 percentage points ahead of the unit case volume due to the timing of concentrate shipments and one extra day. Coca-Cola’s total unit case volume rose 1% year over year in the fourth quarter, led by growth in Brazil, the United States and Japan.
Our model predicted year-over-year organic revenue growth of 5.1% for the fourth quarter, with a 5.3% increase in the price/mix and a 0.2% decline in the concentrate sales volume.
CocaCola Company (The) price-eps-surprise | Coca-Cola Company (The) Quote
Coming to the cluster-category performance, the unit case volume was flat year over year for the sparkling soft drinks category, led by gains in Europe, the Middle East and Africa (“EMEA”), offset by a decline in the Asia Pacific. The trademark Coca-Cola’s unit volume rose 1%, led by growth across all segments. Coca-Cola Zero Sugar advanced 13%, aided by growth in all geographic operating segments. The unit case volume for Diet Coke/Coca-Cola Light improved 2%, primarily driven by growth in North America and the Asia Pacific. The sparkling flavors category declined 1% year over year, backed by a decline in the Asia Pacific, offset by growth in EMEA.
Volume for juice, value-added dairy and plant-based beverages was down 3% in the fourth quarter due to a decline in the Asia Pacific and EMEA, offset by an improvement in Latin America.
Unit volume for the water, sports, coffee and tea category was up 3% year over year in the fourth quarter. Coca-Cola witnessed 4% volume growth in the water category, driven by growth in Latin America, the Asia Pacific and North America. Sports drinks rose 5%, driven by gains in North America and EMEA. The coffee business was flat year over year as growth in EMEA was offset by a decline in the Asia Pacific. The tea volume was up 5%, backed by growth in Latin America, the Asia Pacific and EMEA.
Reported revenues rose 4% year over year for North America, 1% for the Asia Pacific, and 5% for EMEA. However, revenues declined 2% for Latin America and 8% for Bottling Investments.
Organic revenues improved 4% year over year in North America, 5% in the Asia Pacific, 10% in Latin America, 6% in EMEA and 1% in Bottling Investments.
In dollar terms, the operating income rose 32% year over year to $1.84 billion, including a 7-point impact of currency headwinds. Comparable operating income rose 5.6% year over year to $2.89 billion. Comparable currency-neutral operating income advanced 13% on strong organic revenue growth across most segments and effective cost management, partially offset by currency headwinds.
The operating margin of 15.6% in the fourth quarter contracted significantly from 23.5% in the prior-year quarter. The comparable operating margin expanded 48 bps to 24.4%. The comparable currency-neutral operating margin expanded 219 bps to 26.2%.
Our model predicted the fourth-quarter adjusted operating margin to contract 10 bps year over year to 23.9%, driven by a 110-bps contraction in the gross margin, offset by a 100-bps decline in the SG&A expense rate.
For 2026, Coca-Cola anticipates organic revenue growth of 4-5%. Comparable net revenues are expected to include a 1% currency tailwind based on current rates and hedge positions. The guidance also includes a 4% negative impact of acquisitions and divestitures. The company anticipates an underlying effective tax rate of 20.9% for 2026.
Comparable currency-neutral EPS for 2026 is expected to increase 5-6% year over year. The company anticipates comparable EPS growth of 7-8% for 2026 from the $3.00 reported in 2025. Comparable EPS growth is expected to include a currency tailwind of 3%. The EPS guidance also includes a 1% negative impact of acquisitions and divestitures.
Management envisions an adjusted free cash flow of $12.2 billion for 2026, including $14.4 billion in cash flow from operations. Capital expenditure is likely to be $2.2 billion.
For first-quarter 2026, comparable revenues and comparable EPS are expected to include currency tailwinds of 2% each. Comparable revenues are also estimated to include a 1% headwind from acquisitions and divestitures.
We have highlighted three better-ranked stocks from the Consumer Staples sector, namely Monster Beverage MNST, BJ's Wholesale Club BJ and Ollie's Bargain Outlet OLLI.
Monster Beverage is a marketer and distributor of energy drinks and alternative beverages. The company currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for MNST’s 2025 sales and earnings indicates growth of 9.5% and 22.8%, respectively, from the previous year’s reported figures. Monster Beverage has a trailing four-quarter average earnings surprise of 5.5%.
BJ's Wholesale operates warehouse clubs on the East Coast of the United States. The company has emerged as one of the preferred destinations for shoppers when it comes to essentials and other items. It presently has a Zacks Rank #2.
The Zacks Consensus Estimate for BJ's Wholesale’s fiscal 2025 sales and earnings indicates growth of 4.3% and 7.7%, respectively, from the prior-year reported level. BJ delivered a trailing four-quarter earnings surprise of 10.3%, on average.
Ollie's Bargain is a value retailer of brand-name merchandise at drastically reduced prices. OLLI currently has a Zacks Rank #2.
The Zacks Consensus Estimate for Ollie's Bargain’s fiscal 2025 sales and earnings implies growth of 16.7% and 17.7%, respectively, from the previous year’s reported numbers. OLLI delivered a trailing four-quarter earnings surprise of 5.2%, on average.
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This article originally published on Zacks Investment Research (zacks.com).
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