But the world’s biggest soft drink maker also warned that inflation was clouding its outlook for 2022 as supply chain issues and other factors drove up costs for businesses and consumers.
That concern was underscored in the Bureau of Labor Statistics’ monthly inflation snapshot on Thursday, which showed the US consumer price index rose 7.5% over the past year – the largest annual increase in 40 years.
Coke reported higher-than-expected sales and profits for the last three months of 2021. Net revenue rose 10% to $9.46 billion from the same period a year earlier. Net profit soared 66% to $2.41 billion.
“In 2021, our system demonstrated resilience and flexibility in successfully weathering another year of uncertainty,” James Quincey, the company’s chairman and chief executive, said in a statement.
Coke in 2020 suffered its biggest decline in beverage volume sold since just after World War II. Sales and profits rebounded at the start of last year, but the company relied more than usual on sales of products consumed at home, such as cases of soda purchased from supermarkets.
News of better-than-expected fourth-quarter results boosted Coke’s stock higher early in Wall Street’s session on Thursday, hitting an all-time high of $62.20 per share, before falling slightly mid- daytime.
But looking to the future, Coke sees a challenge: inflation.
Rising commodity prices will reduce profit margins due to rising paper, plastic, fuel and transportation costs. The company said it expects revenue growth to slow this year to between 7% and 8%, with earnings growth of 5% to 6%.
Businesses generally pass on the higher costs to consumers, as evidenced by the increase in the consumer price index. And those higher prices at the cash register could curb consumer spending habits, especially when it comes to discretionary purchases.
Optimists say inflation may have peaked: the CPI rose 0.6% in January, the same pace as December and less than the increases of the previous two months. But pessimists worry that inflation has become entrenched in the economy.
And hardly anyone predicts a quick end to the price hike.