ATLANTA, USA – The Coca-Cola Company today reported this week first quarter 2023 results, demonstrating “resilience in the marketplace despite an operating environment that remains dynamic.” The company reported net revenue growth of 5% for its first quarter, driven predominantly by higher prices, to $10.98 billion, from $10.49 billion in the year-ago quarter. On an organic basis, revenue grew 12%, though operating income declined by 1%.
The first-quarter revenue performance was driven by an 11% growth in price/mix and a 1% growth in concentrate sales.
“We are encouraged by our first quarter 2023 results,” said James Quincey, Chairman and CEO of The Coca-Cola Company.
“Our system alignment is stronger than ever, and our networked organization is allowing us to adapt as needed. We continue to invest for the long term, strengthening our capabilities to drive sustainable value for our stakeholders. We have the right portfolio, the right strategy and the right execution to deliver in the marketplace. We are confident in our ability to deliver on our 2023 objectives.”
Revenues: Net revenues grew 5% to $10.98 billion, and organic revenues (non-GAAP) grew 12%. Revenue performance included 11% growth in price/mix and 1% growth in concentrate sales. Concentrate sales were 2 points behind unit case volume, largely due to the timing of concentrate shipments and the impact of one less day in the quarter.
Operating margin: Operating margin was 30.7% versus 32.5% in the prior year, while comparable operating margin (non-GAAP) was 31.8% versus 31.4% in the prior year. Operating margin decline was primarily driven by items impacting comparability and currency headwinds. Comparable operating margin (non-GAAP) expansion was primarily driven by strong topline growth and the impact of refranchising bottling operations, partially offset by an increase in marketing investments and higher operating costs versus the prior year as well as currency headwinds.
Earnings per share: EPS grew 12% to $0.72, and comparable EPS (non-GAAP) grew 5% to $0.68. Comparable EPS (non-GAAP) performance included the impact of a 7-point currency headwind.
Market share: The company gained value share in total nonalcoholic ready-to-drink (NARTD) beverages.
Cash flow: Cash flow from operations was $160 million, a decline of approximately $460 million versus the prior year, largely due to the timing of working capital initiatives and payments related to acquisitions and divestitures. Free cash flow (non-GAAP) declined approximately $520 million versus the prior year, resulting in negative free cash flow of approximately $120 million.
Water, sports, coffee and tea grew 4%. Water grew 5%, led by strong growth in Asia Pacific and Latin America. Sports drinks declined 1%, primarily driven by BODYARMOR and Powerade® in the United States. Tea declined 3%, primarily due to doğadan which was impacted by an earthquake in Türkiye in February. Coffee grew 9%, primarily driven by the strong performance of Costa® coffee in the United Kingdom and China.
The Coca-Cola Company: Global Ventures
Net revenues declined 3%, and organic revenues (non-GAAP) grew 5%. Net revenues included an 8-point currency headwind. Revenue performance benefited from the strong performance of Costa coffee in the United Kingdom and China.
Operating income grew 1%, which included items impacting comparability and a 1-point currency headwind. Comparable currency neutral operating income (non-GAAP) grew 8%, driven by solid organic revenue (non-GAAP) growth as well as a decrease in marketing investments and lower operating costs versus the prior year.
