COCA COLA CO
For the period ended Sep 27, 2024. Filed Oct 24, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 27, 2024 · Filed Oct 24, 2024
KO$95.67-0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-28; filed 2024-07-29.
0000021344-24-000044
Item 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-27; filed 2024-10-24.
0000021344-24-000060
Item 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 179 previous paragraphs and 181 current paragraphs.
90 unchanged; 77 reworded; 14 added; 11 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
Unit case volume in Latin America was even, which included 2% growth in Trademark Coca-Cola, offset by a 3% decline in water, sports, coffee and tea, a 4% decline in sparkling flavors, and a 3% decline in juice, value-added dairy and plant-based beverages. The operating segment’s volume performance included 7% growth in Brazil, offset by a decline of 3% in Mexico and a decline of 8% in Argentina.
Current report
Unit case volume in North America was even, which included 2% growth in Trademark Coca-Cola and 1% growth in both juice, value-added dairy and plant-based beverages as well as sparkling flavors, offset by a 6% decline in water, sports, coffee and tea.
Current report
Unit case volume for Bottling Investments decreased 31%, driven by the impact of refranchising our bottling operations in the Philippines, Bangladesh and certain territories in India.
Current report
Unit case volume for Bottling Investments decreased 22%, driven by the impact of refranchising our bottling operations in the Philippines, Bangladesh and certain territories in India.
Current report
•Asia Pacific — favorable geographic mix and favorable pricing initiatives;
Current report
Fluctuations in foreign currency exchange rates unfavorably impacted our consolidated net operating revenues by 5%. This unfavorable impact was primarily due to a stronger U.S. dollar compared to certain foreign currencies, including the Argentine peso, Mexican peso, Brazilian real, Nigerian naira and Zimbabwean dollar, which had an unfavorable impact on our Latin America; Europe, Middle East and Africa; and Bottling Investments operating segments. The unfavorable impact of a stronger U.S. dollar compared to the currencies listed above was partially offset by the impact of a weaker U.S. dollar compared to certain other foreign currencies, including the British pound, Kenyan shilling and South African rand, which had a favorable impact on our Global Ventures; Europe, Middle East and Africa; and Bottling Investments operating segments. Refer to the heading “Liquidity, Capital Resources and Financial Position — Foreign Exchange” below.
Current report
During the three months ended September 27, 2024, selling, general and administrative expenses decreased $31 million, or 1%, versus the prior year. Foreign currency exchange rate fluctuations decreased selling, general and administrative expenses by 2%. Additionally, the lower advertising expenses were due to the timing of advertising spending and the lower selling and distribution expenses were due to the refranchising of our bottling operations in the Philippines, Bangladesh and certain territories in India. These decreases were partially offset by an increase in other operating expenses.
Current report
During the three months ended September 29, 2023, the Company recorded other operating charges of $359 million. These charges consisted of $296 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, $58 million related to the Company’s productivity and reinvestment program, $4 million for the amortization of noncompete agreements related to the BodyArmor acquisition and $1 million related to tax litigation expense.
Current report
During the three months ended September 27, 2024, operating income was $2,510 million, compared to $3,270 million during the three months ended September 29, 2023, a decrease of $760 million, or 23%. The decrease was driven by the impact of refranchising our bottling operations in the Philippines, Bangladesh and certain territories in India; a decrease in concentrate sales volume of 2%; higher commodity costs; higher other operating charges; and an unfavorable foreign currency exchange rate impact of 15%. These items were partially offset by favorable pricing initiatives and lower selling, general and administrative expenses.
Current report
Asia Pacific’s operating income for the three months ended September 27, 2024 and September 29, 2023 was $459 million and $491 million, respectively. The decrease in operating income was primarily driven by a decrease in concentrate sales volume of 4%, higher commodity costs and an unfavorable foreign currency exchange rate impact of 18%, partially offset by favorable pricing initiatives and the timing of marketing spending.
Current report
Global Ventures’ operating income for the three months ended September 27, 2024 and September 29, 2023 was $77 million and $81 million, respectively. The decrease in operating income was primarily driven by higher operating expenses, partially offset by concentrate sales volume growth of 1% and lower commodity costs.
Current report
Bottling Investments’ operating income for the three months ended September 27, 2024 and September 29, 2023 was $43 million and $132 million, respectively. The decrease in operating income was primarily driven by the impact of refranchising our bottling operations in the Philippines, Bangladesh and certain territories in India; a decline in unit case volume of 1%; higher commodity costs; higher operating expenses; and an unfavorable foreign currency exchange rate impact of 4%, partially offset by favorable pricing initiatives.
Current report
Asia Pacific’s operating income for the nine months ended September 27, 2024 and September 29, 2023 was $1,760 million and $1,727 million, respectively. The increase in operating income was primarily driven by concentrate sales volume growth of
Current report
During the three months ended September 27, 2024, other income (loss) — net was income of $491 million. The Company recognized a net gain of $338 million related to the sale of a portion of our interest in Coke Consolidated, a net gain of $103 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities, dividend income of $74 million and income of $34 million related to the non-service cost components of net periodic benefit income. Other income (loss) — net also included $34 million of costs related to our trade accounts receivable factoring program, a charge of $10 million related to post-closing adjustments for the sale of our ownership interest in an equity method investee in Thailand, net foreign currency exchange losses of $7 million and a charge of $4 million related to post-closing adjustments for the refranchising of our bottling operations in the Philippines.
Removed paragraphs (11)
Previous report
Unit case volume in North America decreased 1%, which included a 5% decline in water, sports, coffee and tea, a 1% decline in Trademark Coca-Cola and a 2% decline in sparkling flavors, partially offset by 4% growth in juice, value-added dairy and plant-based beverages.
Previous report
Unit case volume for Bottling Investments decreased 27%, driven by the impact of refranchising our bottling operations in the Philippines, Bangladesh and certain territories in India.
Previous report
Unit case volume in Latin America increased 4%, which included 6% growth in Trademark Coca-Cola, 5% growth in water, sports, coffee and tea, and 1% growth in sparkling flavors. Unit case volume in juice, value-added dairy and plant-based beverages was even. The operating segment’s volume performance included 5% growth in Mexico and 10% growth in Brazil, partially offset by a 21% decline in Argentina.
Previous report
Unit case volume for Bottling Investments decreased 17%, driven by the impact of refranchising our bottling operations in the Philippines, Bangladesh and certain territories in India.
Previous report
•Asia Pacific — unfavorable geographic and category mix, partially offset by favorable pricing initiatives;
Previous report
During the three months ended June 30, 2023, the Company recorded other operating charges of $1,338 million. These charges primarily consisted of $1,262 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, $35 million related to the discontinuation of certain manufacturing operations in Asia Pacific and $24 million related to the Company’s productivity and reinvestment program. In addition, other operating charges included $8 million related to the restructuring of our North America operating unit, $6 million related to tax litigation expense and $3 million for the amortization of noncompete agreements related to the BodyArmor acquisition.
Previous report
During the three months ended June 28, 2024, operating income was $2,632 million, compared to $2,401 million during the three months ended June 30, 2023, an increase of $231 million, or 10%. The increase was driven by an increase in concentrate sales volume of 6% and favorable pricing initiatives. These items were partially offset by the impact of refranchising our bottling operations in the Philippines, Bangladesh and certain territories in India; higher commodity costs; higher selling, general and administrative expenses; higher other operating charges; and an unfavorable foreign currency exchange rate impact of 16%.
Previous report
Asia Pacific’s operating income for the three months ended June 28, 2024 and June 30, 2023 was $647 million and $673 million, respectively. The decrease in operating income was primarily driven by higher commodity costs, increased marketing spending, the impact of acquired brands and structural changes, and an unfavorable foreign currency exchange rate impact of 7%, partially offset by an increase in concentrate sales volume of 7% and lower other operating charges.
Previous report
Global Ventures’ operating income for the three months ended June 28, 2024 and June 30, 2023 was $92 million and $78 million, respectively. The increase in operating income was primarily driven by concentrate sales volume growth of 3%, decreased marketing spending and a favorable foreign currency exchange rate impact of 1%, partially offset by higher operating expenses.
Previous report
Bottling Investments’ operating income for the three months ended June 28, 2024 and June 30, 2023 was $98 million and $122 million, respectively. The decrease in operating income was primarily driven by the impact of refranchising our bottling operations in the Philippines, Bangladesh and certain territories in India; higher commodity costs; higher operating expenses; and an unfavorable foreign currency exchange rate impact of 3%, partially offset by unit case volume growth of 7% and favorable pricing initiatives.
Previous report
During the three months ended June 28, 2024, other income (loss) — net was income of $2 million. The Company recognized a net gain of $50 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities, dividend income of $48 million and income of $13 million related to the non-service cost components of net periodic benefit cost. Other income (loss) — net also included net foreign currency exchange losses of $64 million, an other-than-temporary impairment charge of $34 million related to an equity method investee in Latin America and $29 million of costs related to our trade accounts receivable factoring program.
Reworded paragraphs (77)
Previous wording
In May 2023, the Company acquired certain brands in Asia Pacific. The impact of acquiring these brands has been included in acquisitions and divestitures in our analysis of net operating revenues on a consolidated basis as well as for the Asia Pacific operating segment for the three and six months ended June 28, 2024. Additionally, in January 2023, the Company refranchised our bottling operations in Vietnam. The impact of this refranchising has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investments and Asia Pacific operating segments for the six months ended June 28, 2024. In January and February 2024, the Company refranchised our bottling operations in certain territories in India, and in February 2024, the Company refranchised our bottling operations in Bangladesh and the Philippines. The impact of each of these refranchisings has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investments and Asia Pacific operating segments for the three and six months ended June 28, 2024.
Current wording
In May 2023, the Company acquired certain brands in Asia Pacific. The impact of acquiring these brands has been included in acquisitions and divestitures in our analysis of net operating revenues on a consolidated basis as well as for the Asia Pacific operating segment for the nine months ended September 27, 2024. Additionally, in January 2023, the Company refranchised our bottling operations in Vietnam. The impact of this refranchising has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investments and Asia Pacific operating segments for the nine months ended September 27, 2024. In January and February 2024, the Company refranchised our bottling operations in certain territories in India, and in February 2024, the Company refranchised our bottling operations in Bangladesh and the Philippines. The impact of each of these refranchisings has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investments and Asia Pacific operating segments for the three and nine months ended September 27, 2024.
Previous wording
5 After considering the impact of structural changes, unit case volume for Bottling Investments for both the three and six months ended June 28, 2024 grew 7%.
Current wording
5 After considering the impact of structural changes, unit case volume for Bottling Investments for the three and nine months ended September 27, 2024 declined 1% and grew 5%, respectively.
Previous wording
6 After considering the impact of structural changes, worldwide concentrate sales volume for the three and six months ended June 28, 2024 grew 6% and 2%, respectively.
Current wording
6 After considering the impact of structural changes, worldwide concentrate sales volume for the three and nine months ended September 27, 2024 declined 2% and grew 1%, respectively.
Previous wording
7 After considering the impact of structural changes, concentrate sales volume for Asia Pacific for the three and six months ended June 28, 2024 grew 7% and 3%, respectively.
Current wording
7 After considering the impact of structural changes, concentrate sales volume for Asia Pacific for the three and nine months ended September 27, 2024 declined 4% and grew 1%, respectively.
Previous wording
Unit case volume in Europe, Middle East and Africa increased 1%, which included 7% growth in water, sports, coffee and tea, and 1% growth in sparkling flavors, partially offset by a 1% decline in juice, value-added dairy and plant-based beverages. Unit case volume in Trademark Coca-Cola was even. The operating segment reported an increase in unit case volume of 7% in the Africa operating unit, partially offset by declines of 2% in the Eurasia and Middle East operating unit and 1% in the Europe operating unit.
Current wording
Unit case volume in Europe, Middle East and Africa decreased 2%, which included a 3% decline in Trademark Coca-Cola, a 2% decline in sparkling flavors and a 5% decline in juice, value-added dairy and plant-based beverages, partially offset by 1% growth in water, sports, coffee and tea. The operating segment’s volume performance included a 7% decline in the Eurasia and Middle East operating unit as well as a 3% decline in the Africa operating unit, partially offset by growth of 1% in the Europe operating unit.
Previous wording
Unit case volume in Asia Pacific increased 3%, which included 8% growth in sparkling flavors and 4% growth in both Trademark Coca-Cola and juice, value-added dairy and plant-based beverages, partially offset by a 4% decline in water, sports, coffee and tea. The operating segment’s volume performance included 15% growth in the India and Southwest Asia operating unit and 5% growth in both the ASEAN and South Pacific operating unit and Japan and South Korea operating unit, partially offset by a decline in unit case volume of 7% in the Greater China and Mongolia operating unit.
Current wording
Unit case volume in Asia Pacific decreased 2%, which included a 5% decline in both water, sports, coffee and tea as well as juice, value-added dairy and plant-based beverages, partially offset by 1% growth in Trademark Coca-Cola. Unit case volume in sparkling flavors was even. The operating segment’s volume performance included a decline in unit case volume of 5% in the Greater China and Mongolia operating unit and a decline of 1% in the ASEAN and South Pacific operating unit, partially offset by growth of 4% in the Japan and South Korea operating unit. Unit case volume performance in the India and Southwest Asia operating unit was even.
Previous wording
Unit case volume for Global Ventures increased 2%, driven by growth in energy drinks, partially offset by a 6% decline in water, sports, coffee and tea. Unit case volume in juice, value-added dairy and plant-based beverages was even.
Current wording
Unit case volume for Global Ventures increased 1%, driven by growth in energy drinks and 3% growth in juice, value-added dairy and plant-based beverages, partially offset by an 8% decline in water, sports, coffee and tea.
Previous wording
Unit case volume in Europe, Middle East and Africa was even, which included 5% growth in water, sports, coffee and tea, and 1% growth in sparkling flavors, offset by a 1% decline in Trademark Coca-Cola and a 3% decline in juice, value-added dairy and plant-based beverages. The operating segment reported an increase in unit case volume of 5% in the Africa operating unit, offset by declines of 1% in the Europe operating unit and 2% in the Eurasia and Middle East operating unit.
Current wording
Unit case volume in Europe, Middle East and Africa was even, which included 4% growth in water, sports, coffee and tea, offset by a 1% decline in Trademark Coca-Cola and a 2% decline in juice, value-added dairy and plant-based beverages. Unit case volume in sparkling flavors was even. The operating segment reported an increase in unit case volume of 4% in the Africa operating unit, offset by a decline of 4% in the Eurasia and Middle East operating unit. Unit case volume performance in the Europe operating unit was even.
Previous wording
Unit case volume in Latin America increased 5%, which included 6% growth in Trademark Coca-Cola, 5% growth in water, sports, coffee and tea, and 1% growth in both sparkling flavors and juice, value-added dairy and plant-based beverages. The operating segment’s volume performance included 6% growth in Mexico and 12% growth in Brazil, partially offset by a decline of 18% in Argentina.
Current wording
Unit case volume in Latin America increased 3%, which included 5% growth in Trademark Coca-Cola and 2% growth in water, sports, coffee and tea, partially offset by a 1% decline in both sparkling flavors and juice, value-added dairy and plant-based beverages. The operating segment’s volume performance included 9% growth in Brazil and 2% growth in Mexico, partially offset by a 17% decline in Argentina.
Previous wording
Unit case volume in North America decreased 1%, which included a 5% decline in water, sports, coffee and tea, and a 1% decline in sparkling flavors, partially offset by 4% growth in juice, value-added dairy and plant-based beverages. Unit case volume in Trademark Coca-Cola was even.
Current wording
Unit case volume in North America decreased 1%, which included a 5% decline in water, sports, coffee and tea, partially offset by 3% growth in juice, value-added dairy and plant-based beverages. Unit case volume in both Trademark Coca-Cola and sparkling flavors was even.
Previous wording
Unit case volume in Asia Pacific increased 1%, which included 4% growth in sparkling flavors, 3% growth in Trademark Coca-Cola and 2% growth in juice, value-added dairy and plant-based beverages, partially offset by a 7% decline in water, sports, coffee and tea. The operating segment’s volume performance included 10% growth in the India and Southwest Asia operating unit, 6% growth in the ASEAN and South Pacific operating unit and 3% growth in the Japan and South Korea operating unit, partially offset by a decline in unit case volume of 9% in the Greater China and Mongolia operating unit.
Current wording
Unit case volume in Asia Pacific was even, which included 3% growth in sparkling flavors and 2% growth in Trademark Coca-Cola, offset by a 6% decline in water, sports, coffee and tea. Unit case volume in juice, value-added dairy and plant-based beverages was even. The operating segment’s volume performance included 7% growth in the India and Southwest Asia operating unit, 3% growth in the ASEAN and South Pacific operating unit and 4% growth in the Japan and South Korea operating unit, offset by a decline in unit case volume of 7% in the Greater China and Mongolia operating unit.
Previous wording
Unit case volume for Global Ventures increased 3%, driven by growth in energy drinks, partially offset by a 7% decline in water, sports, coffee and tea, and a 2% decline in juice, value-added dairy and plant-based beverages.
Current wording
Unit case volume for Global Ventures increased 2%, driven by growth in energy drinks and 1% growth in juice, value-added dairy and plant-based beverages, partially offset by a 7% decline in water, sports, coffee and tea.
Previous wording
During the three months ended June 28, 2024, worldwide concentrate sales volume increased 5% and unit case volume increased 2% compared to the three months ended June 30, 2023. During the six months ended June 28, 2024, worldwide concentrate sales volume increased 1% and unit case volume increased 2% compared to the six months ended June 30, 2023. Concentrate sales volume growth is calculated based on the amount sold during the reporting periods, which is impacted by the number of days. Conversely, unit case volume growth is calculated based on average daily sales, which is not impacted by the number of days in the reporting periods. The differences between concentrate sales volume and unit case volume growth rates for the operating segments were primarily due to the timing of concentrate shipments. In addition, the first quarter of 2024 had one less day when compared to the first quarter of 2023, which also contributed to the differences between concentrate sales volume and unit case volume growth rates on a consolidated basis and for the individual operating segments during the six months ended June 28, 2024. We expect the differences between concentrate sales volume and unit case volume growth rates to lessen over the remainder of the year.
Current wording
During the three months ended September 27, 2024, worldwide concentrate sales volume and unit case volume both decreased 1% compared to the three months ended September 29, 2023. During the nine months ended September 27, 2024, worldwide concentrate sales volume was even and unit case volume increased 1% compared to the nine months ended September 29, 2023. Concentrate sales volume growth is calculated based on the amount sold during the reporting periods, which is impacted by the number of days. Conversely, unit case volume growth is calculated based on average daily sales, which is not impacted by the number of days in the reporting periods. The differences between concentrate sales volume and unit case volume growth rates for the operating segments were primarily due to the timing of concentrate shipments. In addition, the first quarter of 2024 had one less day when compared to the first quarter of 2023, which also contributed to the differences between concentrate sales volume and unit case volume growth rates on a consolidated basis and for the individual operating segments during the nine months ended September 27, 2024. We expect the differences between concentrate sales volume and unit case volume growth rates to lessen over the remainder of the year.
Previous wording
During the three months ended June 28, 2024, net operating revenues were $12,363 million, compared to $11,972 million during the three months ended June 30, 2023, an increase of $391 million, or 3%.
Current wording
During the three months ended September 27, 2024, net operating revenues were $11,854 million, compared to $11,953 million during the three months ended September 29, 2023, a decrease of $99 million, or 1%.
Previous wording
Price, product and geographic mix had a 9% favorable impact on our consolidated net operating revenues. Price, product and geographic mix was impacted by a variety of factors and events including, but not limited to, the following:
Current wording
Price, product and geographic mix had a 10% favorable impact on our consolidated net operating revenues. Price, product and geographic mix was impacted by a variety of factors and events including, but not limited to, the following:
Previous wording
•Europe, Middle East and Africa — favorable pricing initiatives, including inflationary pricing primarily in Nigeria, Türkiye and Zimbabwe, and favorable category mix;
Current wording
•Europe, Middle East and Africa — favorable pricing initiatives, including inflationary pricing primarily in Nigeria, Türkiye and Zimbabwe, and favorable geographic mix, partially offset by unfavorable category mix;
Previous wording
•Bottling Investments — favorable pricing initiatives across most markets and favorable package mix, partially offset by unfavorable geographic mix.
Current wording
•Bottling Investments — favorable pricing initiatives across most markets and favorable geographic mix.
Previous wording
During the six months ended June 28, 2024, net operating revenues were $23,663 million, compared to $22,952 million during the six months ended June 30, 2023, an increase of $711 million, or 3%.
Current wording
During the nine months ended September 27, 2024, net operating revenues were $35,517 million, compared to $34,905 million during the nine months ended September 29, 2023, an increase of $612 million, or 2%.
Previous wording
•Latin America — favorable pricing initiatives, including inflationary pricing in Argentina, partially offset by unfavorable category mix;
Current wording
•Latin America — favorable pricing initiatives, including inflationary pricing in Argentina;
Previous wording
•Asia Pacific — favorable pricing initiatives and favorable package mix, partially offset by unfavorable geographic mix;
Current wording
•Asia Pacific — favorable pricing initiatives and favorable geographic and package mix;
Previous wording
•Bottling Investments — favorable pricing initiatives across most markets and favorable package and category mix, partially offset by unfavorable geographic mix.
Current wording
•Bottling Investments — favorable pricing initiatives across most markets and favorable package mix.
Previous wording
Fluctuations in foreign currency exchange rates unfavorably impacted our consolidated net operating revenues by 6%. This unfavorable impact was primarily due to a stronger U.S. dollar compared to certain foreign currencies, including the Argentine peso, Nigerian naira, Zimbabwean dollar, Turkish lira and Japanese yen, which had an unfavorable impact on our Latin America; Europe, Middle East and Africa; Asia Pacific; and Bottling Investments operating segments. The unfavorable impact of a stronger U.S. dollar compared to the currencies listed above was partially offset by the impact of a weaker U.S. dollar compared to certain other foreign currencies, including the Mexican peso and British pound, which had a favorable impact on our Latin America, Global Ventures and Europe, Middle East and Africa operating segments. Refer to the heading “Liquidity, Capital Resources and Financial Position — Foreign Exchange” below.
Current wording
Fluctuations in foreign currency exchange rates unfavorably impacted our consolidated net operating revenues by 6%. This unfavorable impact was primarily due to a stronger U.S. dollar compared to certain foreign currencies, including the Argentine peso, Nigerian naira, Zimbabwean dollar, Turkish lira and Japanese yen, which had an unfavorable impact on our Latin America; Europe, Middle East and Africa; Asia Pacific; and Bottling Investments operating segments. The unfavorable impact of a stronger U.S. dollar compared to the currencies listed above was partially offset by the impact of a weaker U.S. dollar compared to certain other foreign currencies, including the British pound and Mexican peso, which had a favorable impact on our Global Ventures; Europe, Middle East and Africa; and Latin America operating segments. Refer to the heading “Liquidity, Capital Resources and Financial Position — Foreign Exchange” below.
Previous wording
Our gross profit margin increased to 61.1% for the three months ended June 28, 2024, compared to 59.0% for the three months ended June 30, 2023. Our gross profit margin increased to 61.8% for the six months ended June 28, 2024, compared to 59.8% for the six months ended June 30, 2023. These increases were primarily due to the impact of favorable pricing initiatives and the refranchising of our bottling operations in the Philippines, Bangladesh and certain territories in India, partially offset by the unfavorable impact of foreign currency exchange rate fluctuations and higher commodity costs.
Current wording
Our gross profit margin decreased to 60.7% for the three months ended September 27, 2024, compared to 61.0% for the three months ended September 29, 2023. The decrease was primarily due to the unfavorable impact of foreign currency exchange rate fluctuations and higher commodity costs, partially offset by the impact of favorable pricing initiatives and the refranchising of our bottling operations in the Philippines, Bangladesh and certain territories in India. Our gross profit margin increased to 61.4% for the nine months ended September 27, 2024, compared to 60.2% for the nine months ended September 29, 2023. The increase was primarily due to the impact of favorable pricing initiatives and the refranchising of our bottling operations in the Philippines, Bangladesh and certain territories in India, partially offset by the unfavorable impact of foreign currency exchange rate fluctuations and higher commodity costs.
Previous wording
During the three and six months ended June 28, 2024, selling, general and administrative expenses increased $228 million, or 7%, and increased $394 million, or 6%, respectively, versus the prior year. The increases were primarily due to higher advertising expenses, partially offset by a decrease in selling and distribution expenses. The decrease in selling and distribution expenses was primarily due to the refranchising of our bottling operations in the Philippines, Bangladesh and certain territories in India. During both the three and six months ended June 28, 2024, foreign currency exchange rate fluctuations decreased selling, general and administrative expenses by 5%.
Current wording
During the nine months ended September 27, 2024, selling, general and administrative expenses increased $363 million, or 4%, versus the prior year. The increase was primarily due to higher advertising expenses and higher other operating expenses, partially offset by a decrease in selling and distribution expenses. The decrease in selling and distribution expenses was primarily due to the refranchising of our bottling operations in the Philippines, Bangladesh and certain territories in India. During the nine months ended September 27, 2024, foreign currency exchange rate fluctuations decreased selling, general and administrative expenses by 4%.
Previous wording
As of June 28, 2024, we had $363 million of total unrecognized compensation cost related to nonvested stock-based compensation awards granted under our plans, which we expect to recognize over a weighted-average period of 1.8 years as stock-based compensation expense. This expected cost does not include the impact of any future stock-based compensation awards.
Current wording
As of September 27, 2024, we had $298 million of total unrecognized compensation cost related to nonvested stock-based compensation awards granted under our plans, which we expect to recognize over a weighted-average period of 1.7 years as stock-based compensation expense. This expected cost does not include the impact of any future stock-based compensation awards.
Previous wording
During the three months ended June 28, 2024, the Company recorded other operating charges of $1,370 million. These charges primarily consisted of $1,337 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with our acquisition of fairlife, LLC (“fairlife”) in 2020, $32 million related to the Company’s productivity and reinvestment program, and $3 million for the amortization of noncompete agreements related to the BodyArmor acquisition. These charges were partially offset by a net benefit of $2 million related to a revision of management’s estimates for tax litigation expense.
Current wording
During the three months ended September 27, 2024, the Company recorded other operating charges of $1,044 million. These charges consisted of $919 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with our acquisition of fairlife, LLC (“fairlife”) in 2020, $87 million related to the impairment of a trademark in Latin America and $34 million related to the Company’s productivity and reinvestment program. In addition, other operating charges included $4 million for the amortization of noncompete agreements related to the BodyArmor acquisition and $2 million of transaction costs related to the sale of a portion of our interest in Coca-Cola Consolidated, Inc. (“Coke Consolidated”). These charges were partially offset by a net benefit of $2 million related to a revision of management’s estimates for tax litigation expense.
Previous wording
During the six months ended June 28, 2024, the Company recorded other operating charges of $2,943 million. These charges primarily consisted of $2,102 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with our acquisition of fairlife, $760 million related to the impairment of our BodyArmor trademark and $68 million related to the Company’s productivity and reinvestment program. In addition, other operating charges included $7 million of transaction costs related to the refranchising of our bottling operations in certain territories in India and $7 million for the amortization of noncompete agreements related to the BodyArmor acquisition. These charges were partially offset by a net benefit of $1 million related to a revision of management’s estimates for tax litigation expense.
Current wording
During the nine months ended September 27, 2024, the Company recorded other operating charges of $3,987 million. These charges consisted of $3,021 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with our acquisition of fairlife, $760 million related to the impairment of our BodyArmor trademark, $102 million related to the Company’s productivity and reinvestment program and $87 million related to the impairment of a trademark in Latin America. In addition, other operating charges included $11 million for the amortization of noncompete agreements related to the BodyArmor acquisition, $7 million of transaction costs related to the refranchising of our bottling operations in certain territories in India and $2 million of transaction costs related to the sale of a portion of our interest in Coke Consolidated. These charges were partially offset by a net benefit of $3 million related to a revision of management’s estimates for tax litigation expense.
Previous wording
During the six months ended June 30, 2023, the Company recorded other operating charges of $1,449 million. These charges primarily consisted of $1,324 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, $51 million related to the Company’s productivity and reinvestment program and $35 million related to the discontinuation of certain manufacturing operations in Asia Pacific. In addition, other operating charges included $26 million related to the restructuring of our North America operating unit, $7 million for the amortization of noncompete agreements related to the BodyArmor acquisition and $6 million related to tax litigation expense.
Current wording
During the nine months ended September 29, 2023, the Company recorded other operating charges of $1,808 million. These charges consisted of $1,620 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, $109 million related to the Company’s productivity and reinvestment program and $35 million related to the discontinuation of certain manufacturing operations in Asia Pacific. In addition, other operating charges included $26 million related to the restructuring of our North America operating unit, $11 million for the amortization of noncompete agreements related to the BodyArmor acquisition and $7 million related to tax litigation expense.
Previous wording
Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on the refranchising of our bottling operations in certain territories in India. Refer to Note 9 of Notes to Consolidated Financial Statements for additional information on the tax litigation. Refer to Note 13 of Notes to Consolidated Financial Statements for additional information on the Company’s restructuring initiatives. Refer to Note 16 of Notes to Consolidated Financial Statements for additional information on the fairlife acquisition and the BodyArmor impairment. Refer to Note 17 of Notes to Consolidated Financial Statements for the impact these charges had on our operating segments and Corporate.
Current wording
Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on the refranchising of our bottling operations in certain territories in India and the sale of a portion of our interest in Coke Consolidated. Refer to Note 9 of Notes to Consolidated Financial Statements for additional information on the tax litigation. Refer to Note 13 of Notes to Consolidated Financial Statements for additional information on the Company’s restructuring initiatives. Refer to Note 16 of Notes to Consolidated Financial Statements for additional information on the fairlife acquisition and the impairments. Refer to Note 17 of Notes to Consolidated Financial Statements for the impact these charges had on our operating segments and Corporate.
Previous wording
Fluctuations in foreign currency exchange rates unfavorably impacted consolidated operating income by 16% due to a stronger U.S. dollar compared to certain foreign currencies, including the Argentine peso, Zimbabwean dollar and Turkish lira, which had an unfavorable impact on our Latin America; Europe, Middle East and Africa; and Bottling Investments operating segments. The unfavorable impact of a stronger U.S. dollar compared to the currencies listed above was partially offset by the impact of a weaker U.S. dollar compared to certain other foreign currencies, including the Mexican peso, which had a favorable impact on our Latin America operating segment. Refer to the heading “Liquidity, Capital Resources and Financial Position — Foreign Exchange” below.
Current wording
Fluctuations in foreign currency exchange rates unfavorably impacted consolidated operating income by 15% due to a stronger U.S. dollar compared to certain foreign currencies, including the Argentine peso and Mexican peso, which had an unfavorable impact on our Latin America operating segment. Refer to the heading “Liquidity, Capital Resources and Financial Position — Foreign Exchange” below.
Previous wording
The Europe, Middle East and Africa operating segment reported operating income of $2,332 million and $2,268 million for the six months ended June 28, 2024 and June 30, 2023, respectively. The increase in operating income was primarily driven by favorable pricing initiatives, partially offset by higher commodity costs, increased marketing spending, higher operating expenses and an unfavorable foreign currency exchange rate impact of 18%.
Current wording
The Europe, Middle East and Africa operating segment reported operating income of $977 million and $1,136 million for the three months ended September 27, 2024 and September 29, 2023, respectively. The decrease in operating income was primarily driven by a decline in concentrate sales volume of 7%, higher commodity costs, higher operating expenses and an unfavorable foreign currency exchange rate impact of 12%, partially offset by favorable pricing initiatives and the timing of marketing spending.
Previous wording
Latin America reported operating income of $920 million and $797 million for the three months ended June 28, 2024 and June 30, 2023, respectively. The increase in operating income was primarily driven by an increase in concentrate sales volume of 9% and favorable pricing initiatives, partially offset by increased marketing spending, higher operating expenses and an unfavorable foreign currency exchange rate impact of 13%.
Current wording
Latin America reported operating income of $933 million and $985 million for the three months ended September 27, 2024 and September 29, 2023, respectively. The decrease in operating income was primarily due to increased marketing spending, higher operating expenses, higher other operating charges and an unfavorable foreign currency exchange rate impact of 28%, partially offset by an increase in concentrate sales volume of 2% and favorable pricing initiatives.
Previous wording
Operating income for North America for the three months ended June 28, 2024 and June 30, 2023 was $1,312 million and $1,216 million, respectively. The increase in operating income was primarily driven by favorable pricing initiatives, partially offset by a decline in concentrate sales volume of 1%, higher commodity costs, increased marketing spending and higher operating expenses.
Current wording
Operating income for North America for the three months ended September 27, 2024 and September 29, 2023 was $1,405 million and $1,276 million, respectively. The increase in operating income was primarily driven by an increase in concentrate sales volume of 1% and favorable pricing initiatives, partially offset by higher commodity costs, increased marketing spending, higher operating expenses and an unfavorable foreign currency exchange rate impact of 1%.
Previous wording
Corporate’s operating loss for the three months ended June 28, 2024 and June 30, 2023 was $1,689 million and $1,618 million, respectively. Operating loss in 2024 increased as a result of higher other operating charges primarily due to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, partially offset by a favorable foreign currency exchange rate impact of 1%. Refer to Note 16 of Notes to Consolidated Financial Statements for additional information on the fairlife acquisition.
Current wording
Corporate’s operating loss for the three months ended September 27, 2024 and September 29, 2023 was $1,384 million and $831 million, respectively. Operating loss in 2024 increased as a result of higher other operating charges, primarily due to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, partially offset by a favorable foreign currency exchange rate impact of 1%. Refer to Note 16 of Notes to Consolidated Financial Statements for additional information on the fairlife acquisition.
Previous wording
During the six months ended June 28, 2024, operating income was $4,773 million, compared to $5,768 million during the six months ended June 30, 2023, a decrease of $995 million, or 17%. The decrease was driven by the impact of refranchising our bottling operations in the Philippines, Bangladesh and certain territories in India; higher commodity costs; higher selling, general and administrative expenses; higher other operating charges; and an unfavorable foreign currency exchange rate impact of 11%. These items were partially offset by an increase in concentrate sales volume of 2% and favorable pricing initiatives.
Current wording
During the nine months ended September 27, 2024, operating income was $7,283 million, compared to $9,038 million during the nine months ended September 29, 2023, a decrease of $1,755 million, or 19%. The decrease was driven by the impact of refranchising our bottling operations in the Philippines, Bangladesh and certain territories in India; higher commodity costs; higher selling, general and administrative expenses; higher other operating charges; and an unfavorable foreign currency exchange rate impact of 12%. These items were partially offset by an increase in concentrate sales volume of 1% and favorable pricing initiatives.
Previous wording
Fluctuations in foreign currency exchange rates unfavorably impacted our consolidated net operating revenues by 6%. This unfavorable impact was primarily due to a stronger U.S. dollar compared to certain foreign currencies, including the Argentine peso, Nigerian naira, Zimbabwean dollar and Turkish lira, which had an unfavorable impact on our Latin America; Europe, Middle East and Africa; and Bottling Investments operating segments. The unfavorable impact of a stronger U.S. dollar compared to the currencies listed above was partially offset by the impact of a weaker U.S. dollar compared to certain other foreign currencies, including the Mexican peso and British pound, which had a favorable impact on our Latin America, Global Ventures and Europe, Middle East and Africa operating segments. Refer to the heading “Liquidity, Capital Resources and Financial Position — Foreign Exchange” below.
Current wording
Fluctuations in foreign currency exchange rates unfavorably impacted consolidated operating income by 12% due to a stronger U.S. dollar compared to certain foreign currencies, including the Argentine peso, Zimbabwean dollar and Turkish lira, which had an unfavorable impact on our Latin America; Europe, Middle East and Africa; and Bottling Investments operating segments. The unfavorable impact of a stronger U.S. dollar compared to the currencies listed above was partially offset by the impact of a weaker U.S. dollar compared to certain other foreign currencies, including the Mexican peso and British pound, which had a favorable impact on our Latin America, Global Ventures and Europe, Middle East and Africa operating segments. Refer to the heading “Liquidity, Capital Resources and Financial Position — Foreign Exchange” below.
Previous wording
The Europe, Middle East and Africa operating segment reported operating income of $1,252 million and $1,133 million for the three months ended June 28, 2024 and June 30, 2023, respectively. The increase in operating income was primarily driven by concentrate sales volume growth of 5% and favorable pricing initiatives, partially offset by higher commodity costs, increased marketing spending, higher operating expenses and an unfavorable foreign currency exchange rate impact of 22%.
Current wording
The Europe, Middle East and Africa operating segment reported operating income of $3,309 million and $3,404 million for the nine months ended September 27, 2024 and September 29, 2023, respectively. The decrease in operating income was primarily driven by a decrease in concentrate sales volume of 3%, higher commodity costs, increased marketing spending, higher operating expenses and an unfavorable foreign currency exchange rate impact of 16%, partially offset by favorable pricing initiatives.
Previous wording
Latin America reported operating income of $1,862 million and $1,650 million for the six months ended June 28, 2024 and June 30, 2023, respectively. The increase in operating income was primarily driven by concentrate sales volume growth of 4% and favorable pricing initiatives, partially offset by higher commodity costs, increased marketing spending, higher operating expenses and an unfavorable foreign currency exchange rate impact of 10%.
Current wording
Latin America reported operating income of $2,795 million and $2,635 million for the nine months ended September 27, 2024 and September 29, 2023, respectively. The increase in operating income was primarily driven by concentrate sales volume growth of 4% and favorable pricing initiatives, partially offset by higher commodity costs, increased marketing spending, higher operating expenses, higher other operating charges and an unfavorable foreign currency exchange rate impact of 16%.
Previous wording
Operating income for North America for the six months ended June 28, 2024 and June 30, 2023 was $1,757 million and $2,249 million, respectively. The decrease in operating income was primarily driven by higher commodity costs, increased marketing spending, higher operating expenses and higher other operating charges due to the impairment of our BodyArmor trademark, partially offset by favorable pricing initiatives. Refer to Note 16 of Notes to Consolidated Financial Statements for additional information on the impairment of our BodyArmor trademark.
Current wording
Operating income for North America for the nine months ended September 27, 2024 and September 29, 2023 was $3,162 million and $3,525 million, respectively. The decrease in operating income was primarily driven by higher commodity costs, increased marketing spending, higher operating expenses and higher other operating charges due to the impairment of our BodyArmor trademark, partially offset by favorable pricing initiatives. Refer to Note 16 of Notes to Consolidated Financial Statements for additional information on the impairment of our BodyArmor trademark.
Previous wording
Asia Pacific’s operating income for the six months ended June 28, 2024 and June 30, 2023 was $1,301 million and $1,236 million, respectively. The increase in operating income was primarily driven by concentrate sales volume growth of 3%, favorable pricing initiatives, lower other operating charges, and the impact of acquired brands and structural changes, partially offset by higher commodity costs, increased marketing spending and an unfavorable foreign currency exchange rate impact of 4%.
Current wording
1%, favorable pricing initiatives, lower other operating charges and the impact of acquired brands and structural changes, partially offset by higher commodity costs and an unfavorable foreign currency exchange rate impact of 8%.
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Previous report — wording carried elsewhere
Fluctuations in foreign currency exchange rates unfavorably impacted consolidated operating income by 11% due to a stronger U.S. dollar compared to certain foreign currencies, including the Argentine peso, Zimbabwean dollar and Turkish lira, which had an unfavorable impact on our Latin America; Europe, Middle East and Africa; and Bottling Investments operating segments. The unfavorable impact of a stronger U.S. dollar compared to the currencies listed above was partially offset by the impact of a weaker U.S. dollar compared to certain other foreign currencies, including the Mexican peso, which had a favorable impact on our Latin America operating segment. Refer to the heading “Liquidity, Capital Resources and Financial Position — Foreign Exchange” below.