Coca-Cola (KO.US) is set to release its Q2 2025 earnings tomorrow before the market opens. The market anticipates modest revenue growth and a slight dip in earnings per share. These results will be released in an interesting environment, following PepsiCo's strong earnings report last week (which saw their stock jump over 7.5% after publication, and currently remains about 4.4% above pre-release levels). Additionally, there's been pressure from Donald Trump for Coca-Cola to revert to sweetening its flagship beverage with sugar.
Ahead of the earnings release, Coca-Cola's valuation remains close to its three-year historical average. However, compared to its sector and the broader S&P 500 index, it's currently valued below historical trends. Source: Bloomberg Finance L.P.
Q2 2025 Outlook
Analysts are forecasting a slight decrease in Earnings Per Share (EPS) to $0.83 (down from $0.84 a year ago). For revenue, the consensus expects modest growth to $12.55 billion (+1% year-over-year). Notably, Coca-Cola has surpassed revenue expectations in each of the past eight quarters. This, combined with PepsiCo's strong performance, adds extra pressure for robust sales figures in Q2 2025.
From a margin perspective, the ongoing weakening of the dollar is a positive signal for international markets. South America and Asia remain crucial markets for Coca-Cola, and favorable currency movements in these regions could further boost sales growth.
Estimated Q2 2025 Results. Source: Bloomberg Finance L.P.
2Q25 Financial results est:Â
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Estimated Comparable EPS: 83 cents
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Estimated Adjusted Organic Revenue Growth: +4.55%
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Estimated Capital Expenditure: $490.9 million
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Estimated Comparable Operating Margin: 33.2%
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Estimated Comparable Adjusted Gross Margin: +61.4%
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Estimated Price/Mix Change: +5.48%
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Estimated Change in Concentrate Sales: -0.61%
Potential Recipe Change?
Investors will be keenly listening for any information during the earnings call regarding a decision on sweetening Coca-Cola's beverage in the U.S. Last week, Trump indicated on his social media that the company should revert to using American sugar instead of the corn-based syrup it has used since the 1980s.
While the company has not yet officially announced whether it will introduce a change to its main beverage, such a move could open the door for a special, sugar-sweetened edition of the drink to be released in the U.S.
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