Coca-Cola’s European arm, Coca-Cola Europacific Partners, and its bottling partner, Coca-Cola HBC, both slumped on the stock exchange this morning after the former downgraded its revenue guidance.
The European business fell more than 11 per cent in early trades on the London Stock Exchange, while the bottling business dropped more than seven per cent.
Coca-Cola Europacific Partners told markets this morning that revenue growth would be three to four per cent this year, down from four per cent.
The company also estimated a currency headwind of 150 basis points to revenue and 200 basis points to operating profit.
It’s also operating in a challenging macro environment, particularly in developed markets, with CEO Damian Gammell calling conditions “volatile” – although he said the business “remain[s] resilient”.
Chief executive of Coca-Cola HBC, Zoran Bogdanovic, said he was “mindful” of “what is a challenging and unpredictable macroeconomic and geopolitical environment”.
But Bogdanovic said that HBC had “strong start” to the year – revenue grew 9.9 per cent in the first half – and was “push [ing] boundaries across markets”.
HBC expects to deliver growth in organic revenue and earnings before interest and tax (EBIT) at the top end of its range for 2025.
Coca-Cola’s problems
According to Danni Hewson, head of financial analysis at AJ Bell, Coca-Cola’s problem is that it’s “doing well but clearly not well enough”.
“One arm fail[ed] to deliver the forecast upgrade many investors had anticipated and the other temper[ed] its outlook,” Hewson said.
“Consumers love the brand and they’ve proven time and again they are prepared to stomach price hikes, which has helped the company protect margins. But volume growth hasn’t been stellar and that’s troubling.
“There’s also ongoing uncertainty about how tariffs are going to impact the consumer, and conflicts across the world are also denting some sales,” she added.