Why Coca-Cola Stock Popped Today
Key Points
Coca-Cola is winning market share by adapting to shifting consumer preferences.
Management sees more gains ahead.
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Shares of Coca-Cola (NYSE: KO) rose on Tuesday, as investors applauded the soda leader's third-quarter results. As of 1:55 p.m. ET, Coca-Cola's stock price was up more than 4%.
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Coke's third-quarter results
Coca-Cola's revenue rose 5% year over year to $12.5 billion, driven by price increases and a 1% rise in unit case volume. Strong sales of Coca-Cola Zero Sugar, which jumped 14%, contributed to the gains.
Notably, Coca-Cola continued to win market share in the nonalcoholic ready-to-drink segment. Fuze Tea has increased its retail value by a whopping five times the industry average so far in 2025. Powerade and Bodyarmor also gained share in the sports drink category.
Better still, cost reduction initiatives helped to boost Coca-Cola's profitability. Its comparable operating margin increased to 31.9% from 30.7% in the year-ago quarter.
The soda king's adjusted earnings, in turn, improved by 6% to $0.82 per share. That bested Wall Street's estimates, which called for adjusted earnings per share of $0.78.
Thriving in a challenging environment
On a conference call with analysts, chief operating officer Henrique Braun noted that lower-income consumers were pulling back a bit on spending. Coca-Cola is adjusting to the current challenging financial environment by offering more affordable options like mini cans and other products with smaller serving sizes.
Looking ahead, management forecasts full-year organic revenue growth of 5% to 6% in 2025. Coca-Cola also expects to generate adjusted earnings growth of 3% -- and 8% when stripping out the effects of foreign currency fluctuations.
"While the overall environment has continued to be challenging, we've stayed flexible -- adapting plans where needed and investing for growth," CEO James Quincey said.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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