CocaCola (NYSE:KO) executives used the company’s fourth-quarter 2025 earnings call to recap full-year performance, outline 2026 guidance, and discuss a leadership transition that will move Chief Executive Officer James Quincey into an executive chairman role while Henrique Braun becomes CEO.
Leadership transition and strategic progress since 2017
Quincey opened the call by noting it would be his last earnings call as CEO. He reviewed progress against four strategic priorities introduced at CAGNY 2017: accelerating a consumer-centric brand portfolio, strengthening the system, digitizing the enterprise, and unlocking the power of people.
Quincey also pointed to improved alignment with bottling partners and progress toward completing the refranchising strategy, describing a “virtuous circle” of higher returns, investment, and value creation. He said Coca-Cola has averaged 7% organic revenue growth since 2017 and reached $3 in comparable earnings per share in 2025 after years around $2, despite ongoing currency headwinds. Quincey said the company created more than $150 billion of market value for shareowners over that span.
2025 performance: volume momentum in Q4 and margin expansion
Braun, the incoming CEO, said Coca-Cola delivered on its initial 2025 top- and bottom-line guidance set the prior February and extended its streak of gaining value share to 19 consecutive quarters. He said unit case volume was flat for the year but improved sequentially during the fourth quarter. Braun noted that over the past 50 years, annual volume declined only once, during the pandemic.
He said efficiency and effectiveness initiatives drove “strong comparable operating margin expansion” in 2025, contributing to 4% comparable EPS growth despite five points of currency headwinds and a two-point increase in the comparable effective tax rate.
Chief Financial Officer John Murphy provided fourth-quarter details, including:
- Organic revenue growth: 5% in Q4.
- Unit case volume: 1% growth in Q4.
- Concentrate sales: grew three points ahead of unit cases, driven by shipment timing and an extra day in the quarter.
- Price/mix: 1% reported, driven by roughly four points of pricing actions offset by three points of unfavorable mix tied to an “unusual combination” of business mix, category mix, and timing items.
- Comparable margins: both gross and operating margins increased about 50 basis points, with underlying expansion partly offset by currency headwinds.
- Comparable EPS: $0.58 in Q4, up 6% year-over-year despite 5% currency headwinds and a higher comparable tax rate.
Regional commentary: strength in North America and mixed results in Asia Pacific
In North America, Braun said the company delivered strong results despite continued macro pressure on lower-income consumers, gaining both volume and value share and growing volume, revenue, and comparable operating income. He said several brands grew volume, including Trademark Coca-Cola, Sprite Zero, Fresca, Dasani, fairlife, BODYARMOR, and Powerade. He highlighted Sprite Chill and Coca-Cola Holiday Creamy Vanilla as innovations that performed well, and said the system emphasized cold drink equipment placement, value offerings, and “winning share of visible inventory.”
In Latin America, Braun said the company gained value share and grew volume, revenue, and comparable currency-neutral operating income in the fourth quarter. He said Coca-Cola Zero Sugar and Sprite Zero Sugar performed strongly, and noted that Santa Clara, a value-added dairy brand in Mexico, became a billion-dollar brand. Braun also cited marketing tied to passion points (including linking Fanta with Halloween) and continued focus on refillables, value offerings, and absolute price points.
In EMEA, Braun said Coca-Cola gained value share and grew volume and revenue, with Europe starting slowly in the quarter before recovering. He referenced holiday and Winter Olympics-related campaigns, consumer engagement efforts tied to the English Premier League in the U.K., and activations in Italy tied to the Olympics torch relay. He added that volume grew in both “Euro and the Middle East” and in Africa, citing innovations such as Sprite Lemon Mint and campaigns including Schweppes “Born Social 2.0” and Share a Coke in Nigeria.
In Asia Pacific, Braun said value share increased and volume was flat, but revenue and profit declined during the quarter. He said Japan’s volume growth was offset by declines elsewhere, driven by softer consumer spending, weaker industry performance, and cycling strong growth in the prior year. He said the company is investing in long-term opportunities with granular channel execution and tailored price-pack architecture focused on attractive price points and value offerings.
2026 guidance: balanced growth, FX tailwind, and divestiture headwinds
Murphy said Coca-Cola expects 2026 organic revenue growth of 4% to 5% and comparable currency-neutral EPS growth (excluding acquisitions and divestitures) of 5% to 6%. He added that the company expects the overall impact on its cost basket to be manageable, notwithstanding commodity volatility and evolving global trade dynamics.
He also outlined expected impacts from portfolio actions and currency:
- Divestitures: about a four-point headwind to comparable net revenues and a one-point headwind to comparable EPS, assuming the pending sale of Coca-Cola Beverages Africa closes in the second half of 2026 (subject to regulatory approvals) and including the divestiture of Chi in Nigeria.
- Currency: about a one-point tailwind to comparable net revenues and a three-point tailwind to comparable EPS in 2026 based on current rates and hedged positions.
- Tax: underlying effective tax rate expected to be 20.9%.
All-in, Murphy said the company expects comparable EPS growth of 7% to 8% versus $3 in 2025. He also guided to approximately $12.2 billion of free cash flow in 2026, reflecting about $14.4 billion in cash from operations less roughly $2.2 billion of capital investment.
Capital allocation, innovation priorities, and key Q&A themes
Murphy reiterated a focus on reinvesting in the business and growing the dividend, noting the company’s 63-year track record of dividend increases and a 2025 dividend payout of 73% of adjusted free cash flow, in line with a long-term 75% target. He said share repurchases continue primarily to offset employee stock option dilution, and that the company intends to remain flexible and opportunistic on acquisitions. He said more than half of Coca-Cola’s 32 billion-dollar brands were created inorganically, while acknowledging the acquisition track record “has not been perfect.”
During the question-and-answer session, executives discussed the mix of volume and pricing behind 2026’s 4% to 5% organic revenue growth outlook. Quincey encouraged analysts to view price/mix over a full-year lens, noting that the fourth-quarter mix headwind was offset by other quarters and that underlying pricing was about 4% in Q4. He said the company expects a more balanced mix of volume and price as inflation moderates, though he cautioned that volume improvement needs to come from key long-term growth markets such as India, China, parts of ASEAN, and some European countries, with Mexico facing an excise tax headwind early in 2026.
On profitability, Murphy said Coca-Cola has averaged roughly 60 basis points of operating margin expansion per year over the past eight years and described multiple levers across supply chain, marketing investment, and operating model execution, with North America a standout performer.
Executives also addressed foreign exchange. Murphy said the company’s hedging program is designed to enable consistent local-market investment and provide enterprise-level clarity for U.S. dollar earnings growth. He said the 2026 currency tailwind reflected in guidance is driven largely by a weaker dollar in certain large emerging markets, including Latin America and South Africa.
In additional Q&A, Quincey said potential U.S. SNAP changes are expected to be “manageable.” Braun said Mexico’s tax is a headwind but described the system as equipped to manage it through revenue growth management across pack sizes, prices, and channels, while also noting Mexico’s role as a World Cup host and the system’s 100-year anniversary in the country. Braun also discussed India investment and described “Coke Buddy,” a digital platform connecting bottlers with customers, along with efforts to deploy AI and develop end-to-end digital capabilities to translate engagement into transactions.
Braun said he expects to outline more details on evolving culture, innovation, and the company’s digital direction at CAGNY, describing a need to get closer to consumers locally and improve speed to market. He also noted the call referenced two additions to the billion-dollar brand list: Innocent and Santa Clara.
About CocaCola (NYSE:KO)
The Coca‑Cola Company (NYSE: KO) is a global beverage manufacturer, marketer and distributor best known for its flagship Coca‑Cola soda. Headquartered in Atlanta, Georgia, the company develops and sells concentrates, syrups and finished beverages across a broad portfolio of brands. Its product range spans sparkling soft drinks, bottled water, sports drinks, juices, ready‑to‑drink teas and coffees, and other still beverages, marketed under both global and regional brand names.
Coca‑Cola’s brand portfolio includes widely recognized names such as Coca‑Cola, Diet Coke, Coca‑Cola Zero Sugar, Sprite, Fanta, Minute Maid, Powerade and Dasani, and in recent years the company has expanded into the coffee and premium beverage categories through acquisitions such as Costa Coffee.
