The Coca-Cola Company Reports Mixed Q3 2024 Financial Results with Slight Revenue Decline and Increased Operating Charges

The Coca-Cola Company reported its financial results for the third quarter and the first nine months of fiscal year 2024, revealing a mixed performance compared to the previous year. For Q3 2024, net operating revenues reached $11,854 million, a slight decline of $99 million (1%) from $11,953 million in Q3 2023. The decrease was attributed to a 2% decline in concentrate sales volume and unfavorable foreign currency exchange impacts, which reduced operating income by 15%. However, favorable pricing initiatives across various regions partially offset these declines.

Gross profit for Q3 2024 was $7,190 million, down from $7,296 million in Q3 2023, resulting in a gross profit margin of 60.7%, slightly lower than the 61.0% margin in the prior year. Operating income fell significantly to $2,510 million from $3,270 million, a decrease of 23%. This decline was primarily driven by higher commodity costs, increased other operating charges, and the refranchising of bottling operations in several markets.

For the nine months ended September 27, 2024, net operating revenues increased to $35,517 million, up 2% from $34,905 million in the same period of 2023. The growth was supported by favorable pricing initiatives, although fluctuations in foreign currency exchange rates negatively impacted revenues by 5%. Gross profit for the nine-month period rose to $21,806 million, with a gross profit margin improvement to 61.4% from 60.2% in the previous year.

Consolidated net income for Q3 2024 was $2,850 million, down from $3,083 million in Q3 2023, while net income attributable to shareowners also decreased to $2,848 million from $3,087 million. For the nine months, consolidated net income was $8,436 million, compared to $8,717 million in the same period last year.

The company reported significant other operating charges totaling $1,044 million for Q3 2024, which included $919 million related to the remeasurement of contingent consideration liability from the fairlife acquisition and $87 million for trademark impairment in Latin America. For the nine months, total other operating charges amounted to $3,987 million.

On the balance sheet, total assets increased to $106,266 million as of September 27, 2024, up from $97,703 million at the end of 2023. Cash and cash equivalents rose to $13,938 million, reflecting a strong liquidity position. However, long-term debt also increased to $42,994 million from $35,547 million at the end of 2023.

The company continues to navigate challenges, including tax litigation with the IRS, which resulted in a federal income tax liability of $6.0 billion for the years 2007 through 2009, recently settled. The ongoing tax matters could potentially increase the effective tax rate by approximately 3.5% in future years.