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• The Coca-Cola Company announced positive financial results for their Q4 and 2023 year-end today.
• These included a satisfying increase in revenue and sales.
• However, the company did face other challenges and struggled with headwinds, resulting in a disappointing EPS.

The Coca-Cola Company (KO) reported its Q4 and full-year 2023 financial results today, including an increase in both revenues and gross profit.

The results represented some tangible growth for 2023 for the company, after a busy year for the brand which involved several headwinds and the ongoing challenges of selling costlier beverages to increasingly cash-strapped consumers.

In terms of sales volumes, the famous beverage company’s global unit case sales grew, although EPS figures disappointed.
 

The results

Coca-Cola’s gross profit grew 11% to $6.1 billion for the company for the full 2023 year, up from $5.6 billion for the 2022 full year.

In terms of sales volumes, the famous beverage company’s global unit case sales grew by 2% for both the Q4 quarter and for the full year.

For Q4, net revenues grew 7% to $10.8 billion, and organic revenues (non-GAAP) grew 12%. This was driven by 9% growth in price/mix and 3% growth in concentrate sales.

For the full 2023 year, net revenues grew 6% to $45.8 billion, and organic revenues (non-GAAP) grew 12%, driven by 10% growth in price/mix and 2% growth in concentrate sales.

Further good news was that the company’s operating income grew 10% for the quarter and 4% for the full year, while cash flow increased a marginal 5% for the full year.
 

EPS downside

However, a downside which no doubt disappointed consumers was that Q4’s EPS declined 2% to $0.46, while comparable EPS (non-GAAP) grew 10% to $0.49.

Still, for the full 2023 year, EPS grew 13% overall to $2.47, and comparable EPS (non-GAAP) grew 8% to $2.69.
 

Expectations ahead of results announcement

Prior to the company announcing these results, the market had modestly high hopes for Coca-Cola, with most analysts seeming to predict revenue growth of around 6% to 7% YoY for Q4 of 2023.

Investors and market participants alike also seemed to expect an uptick in profits, with a 10% rise in net income, to around $10.7 billion, predicted for Q4.

In terms of shareholders’ expectations, an increase of Coca-Cola’s EPS to around $0.49 per share was also anticipated.
 

Comparison to previous year

Looking at the company’s year-end 2022 results, the difference is even more pronounced. Here are the vital statistics for FY 2022:

• Global unit case volume declined 1% for Q4 2022, but overall increased 5% for the full year
• Net revenues grew 7% for Q4 2022 and grew 5% for the full year
• Operating income grew an impressive 24% for Q4 2022 and 6% for the full 2022 year
• However, free cash flow was down 13% in Q4 2022, and down 15% for the full year
   

Outlook for 2024

Looking ahead to 2024, the company hinted in its announcement of the results that 2024 can expect some obstacles to growth for Coca-Cola, including “headwind[s] from acquisitions, divestitures and structural changes”, but that the company would still achieve tangible growth in spite of these challenges, anticipating “organic revenue (non-GAAP) growth of 6% to 7%” and EPS growth of 8% to 10% for the full 2024 year.

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