Coca-Cola HBC, a bottler based in Switzerland, raised its annual operating profit and revenue forecast. The company’s first-half revenue increased, partially due to measures taken to mitigate the impact of high inflation and currency fluctuations. However, despite the revised forecast, the stock declined by nearly 2% in early trading, as investors focused on the lower-than-expected earnings before interest and taxes (EBIT) and earnings per share (EPS).
Half-year organic EBIT grew by 7.5%, and the comparable EPS was reported at 1.04 pounds, falling short of the forecasted 7.9% EBIT and EPS of 1.08 pounds, as indicated by an analyst consensus compiled by the company. Jefferies commented in a note that the shares might weaken slightly due to the slight EPS miss, especially considering the strong performance of the shares earlier in the year, with a nearly 19% increase as of the previous trading day.
Looking ahead to the full year 2024, Coca-Cola HBC anticipates organic revenue growth to be between 8% and 12%, surpassing the previous mid-term target range of 6%-7%. Organic EBIT growth is also expected to range from 7% to 12%, up from the previous estimates of 3% to 9%. The company reported a 13.6% growth in organic revenue for the first half of the year. Despite price increases, demand for packaged beverages and food has remained strong, and the gradually improving economic environment has benefited beverage makers. Nevertheless, the company remains cautious due to the uncertain consumer environment and expects ongoing challenges in the macroeconomic and geopolitical backdrop in the second half of the year.
Coca-Cola, the U.S. beverage giant that owns more than 20% of the bottler, recently raised its annual sales and profit forecasts. This is attributed to expected benefits from price hikes and an advertising campaign, particularly in international markets where demand for its sodas and juices has been relatively strong.