Coca-Cola Co on Tuesday raised its annual sales and profit forecasts for a second time this year, riding on resilient demand from consumers for its sodas, juices and energy drinks as well as higher prices.
The company's shares rose more than 2% in premarket trading after it also topped expectations for third-quarter results.
Rival PepsiCo also beat analysts' expectations and said it would hike prices next year as consumers continued to spend on sodas, dubbed "affordable luxuries", at a time of elevated food prices and higher cost of living.
Coca-Cola's average selling prices rose 9% in the third quarter, the company said, while overall unit case volumes increased 2%.
"It does not appear that these levels of pricing are in a position to be competed away by another (or) being undercut by certain private label alternatives," said Sarah Henry, managing director and portfolio manager at Logan Capital Management.
Still, benefits from the increases are expected to moderate nearly two years after many consumer goods companies hiked product prices to shield themselves from rising labor and transportation costs.
Focus has now largely shifted to efforts to grow volumes as cost of production eases while major firms including Procter & Gamble face pressure from countries like France to cut prices due to still strained purchasing power in many regions.
The beverage giant now sees full-year organic revenue growth of 10% to 11%, compared with its prior forecast of an increase of 8% to 9%.
The maker of Sprite and Fanta forecast annual core earnings per share to rise between 7% and 8%, compared to previous expectations of a 5% to 6% rise.
Third-quarter net revenue rose nearly 8% to $11.91 billion, topping analysts' estimates of $11.44 billion, according to LSEG data. Adjusted earnings of 74 cents per share also beat expectations of 69 cents.
(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Sriraj Kalluvila)
