Coca-Cola(KO.US) "Price Increase Dividend" Fades: Q4 Revenue and 2026 Organic Sales Guidance Fall Short of Expectations

Coca-Cola (KO.US) announced its fourth-quarter financial results. The company reported a 2.2% year-over-year increase in revenue to $11.8 billion, but it fell short of market expectations. Adjusted earnings per share rose 6% year-over-year to $0.58, surpassing the consensus estimate of $0.56, and included a 9 percentage point unfavorable currency impact.

Revenue growth was primarily driven by a 4% increase in concentrate sales and a 1% increase in price/product mix. Concentrate sales outperformed unit case sales by 3 percentage points, mainly due to shipment timing and an extra day.

Organic revenue grew 5%, exceeding the market consensus of 4.8%. The growth was mainly driven by business expansion in Latin America (+10%) and Europe, Middle East, and Africa (+6%).

Quarterly case sales increased by 1%, mainly due to growth in Brazil, the United States, and Japan. In Q4, growth in Europe, Middle East, and Africa (EMEA) was offset by declines in the Asia-Pacific region; for the full year, EMEA’s growth was also offset by declines in Asia-Pacific and Latin America. The Coca-Cola brand grew 1% in Q4 and was flat for the full year. All regional business units saw growth this quarter; however, for the full year, EMEA and Asia-Pacific’s growth was offset by declines in Latin America and North America.

The company stated that zero-sugar Coca-Cola sales remained strong, with an expected 14% growth in 2025. Diet Coke grew 2% in Q4, with flat full-year sales. As demand for sugary sodas declines, zero-sugar sodas continue to be a bright spot for the beverage company.

In Q4, Coca-Cola’s price/product mix increased by 1%, mainly due to market pricing strategies, but was partially offset by an unfavorable product mix.

After multiple rounds of price increases, the company’s sales growth has slowed, especially in North America, as the popularity of GLP-1 weight-loss drugs has led consumers to avoid high-sugar products. Like its peers, Coca-Cola faces challenges from currency fluctuations and rising input costs.

Coca-Cola also provided full-year 2026 sales guidance, but its outlook was below Wall Street expectations. The company is actively expanding its zero-sugar beverage market. Coca-Cola expects organic sales to grow 4% to 5%, compared to analysts’ average estimate of 5.01%, and expects earnings per share to increase 7% to 8%.

A more optimistic view suggests that under the leadership of incoming CEO Henrique Braun, Coca-Cola believes its expanding beverage portfolio—including zero-sugar sodas, sports drinks, and water—will appeal to consumers, as they gradually shift from traditional sugary soft drinks to healthier options. However, Coca-Cola also faces challenges, such as new policies in some U.S. states restricting the use of food assistance benefits for purchasing soft drinks, and strong messaging from the Trump administration about the health risks of soda.

Following the earnings release, Coca-Cola’s stock briefly fell 4% in pre-market trading. As of Monday’s close, the stock has gained nearly 12% this year, compared to a roughly 2% increase in the S&P 500 index during the same period.