The Coca-Cola Company (KO) 30 Apr 242024 Q1 Earnings call transcript

At this time, I'd like to welcome everyone to the Coca-Cola Company's First Quarter 2024 Earnings Results Conference Call. Today's call is being recorded.

If you have any objections, please disconnect at this time. [Operator Instructions]

I would like to remind everyone that the purpose of this conference is to talk with investors, and therefore, questions from the media will not be addressed. Coca-Cola's now department like contact any they should would questions. I to participants Media if Relations have Media introduce Ms. President Vice Halpern, and Investor of Robin Relations. Head Ms. Halpern, you begin. may now

with for Good thank John Murphy, Chief Chief joining James and and Quincey, President Officer. us. Executive morning, Officer; our you I'm Financial and our and Chairman here

to under We've posted website. in be reconcile accepted non-GAAP certain Information to These that referred section may reported Investors schedules the under results this principles. accounting morning financial generally Financial company of as measures our

can our and cautionary also objectives, earnings margins. This including analysis contained statements the growth find section You statements, in schedules in earnings periodic SEC with company's long-term operating website of which in same our the report. should and call of forward-looking concerning an may be contain that considered release provide statements conjunction our in

your we'll over Instructions] Now Following to take will call James. prepared questions. turn the [Operator remarks, I

morning, growth beverage we XXXX highlight grow and portfolio. to agility in I'll I'll and meet are discuss systems use deliver first Robin, continued everyone. differed our total portfolio, we the we operating Then guidance, the with these to greatly results. as We're good a backdrop we've across how quarter us this all-weather year on to the need mindset to updating off been with strategy. executing building quarter markets our consumer deliver our again, The scale Thanks, our our our drivers powerful equip but we our strong and which coupled by once good capabilities, today. This results our morning, continue and needs momentum the start how

we're partners. currency and In temporary guidance. In continued to updated continued Japan local of deliver continuing Thailand. growth portion a in managing factors Korea, growth leveraging return Indonesia recovered including Philippines X% financial and results business. value and at-home market shown grew the We South away-from-home to quarter, gained our Finally, large Pacific, across world, as of business, earnings momentum gained and that we by and share impacted a India's on was to John growth. to across bottling and some by our share traction Asia will with currency momentum win margins, comparable the end headwinds, our despite we about remain still of is and the We expertise ways. per growth execution and to our China, channels. Across our earnings levels. below opportunities We're but at March. In the the the a both by XXXX sales consumer in fluctuations expanded first optimistic retail the in number in comparable up continues X% we're scale XXXX and invest stepping our of discuss us, we of many improve, ahead volume relying volume confidence

Middle challenges Jack markets from momentum number region. East business momentum in example, also to last consumer a paired focus and markets our devaluations. on affect expanded more our For to to Sprite economic quarter, POWERADE in leading away-from-home market business macro improved approach Europe, greater new saw navigating improvement Daniels a generated horizontal trends to drive EMEA, for Fuze Eurasia strong and during locations in execution. In continued significant spicy and and core the performance, surgical we're in the continue in more and of quarter. Africa confidence. market more gradual volume X seeing with Tea and Geopolitical We channels. segmented currency while European Coca-Cola with and the

drinks, behind to term. North leading the brands gains. that the BODYARMOR of notwithstanding brands, speak displays. in gaining across strength more sequential the to with and quarter of start trends. posting softdrink Coke We strategy and the we've Value-added a remain for our of and charge our in-store are share drive before Across to local sports quarter and improvement traction, last had dairy months each we closely sugar favorable, X working The XX-ounce dynamics, compelling further Power introduced fairlife Zero Spiced sparkling premiumization. featured long share the ongoing and volume our Core John noncash improved believe to will launch POWERADE in impairment to Sugar performance continued elasticities the strong, partners slim to in X-brand we're and committed manage detail. We slow cans with these America challenging was of is investing seen

dedicated the do, continued our the sales the execution force I.V. sports growth stepped While Flash and and up improved to we're innovations, we including more driving execution BODYARMOR water Zero in recent have in by on-shelf Sugar still work by encouraged and

has to In continued Mexico, moderated Brazil while trends wages trend Colombia, inflationary inflation conditions. North monitoring we're in and in by momentum traffic at-home and America, away-from-home Argentina consumption. Latin America, upward experience continue consumer and and driven continued. Performance closely While was strength to high between sentiment volume

have sports, alcohol are Sparkling Coca-Cola the and We strong quarter. Commercial driving shelf incidence improved ready-to-drink leadership space portfolio supported in digitization. flavors, juices continuing performance. across performed outlet Latin also quality with its initiatives by Sugar ongoing America, and our during basket Zero well

that developed platforms have environment is region. Across We capabilities in the order more suggested inflationary customers markets, in than reach the million overall normalizing. digital X

experiencing to pricing, to AI-based level. We're CAGNY, an flywheel managing and fan of across fans, we proactively continues and handful However, beverage And navigate continuing a or we K-Wave X momentum we faster bigger, pop quarter, delivering platform innovating K-pop markets these volatile bets. inflation, collaboration at the be building In part challenges celebrates in with units. incremental experience. Creations portfolio. continuing first intense to loved spin includes locally, and we're have bolder a headwinds. at as Korean X strategic of driving markets by there operating offset K-Wave that our total consolidated are We're K-pop Coke feel confident markets, brands launched is as environments, discussed across across global playbook emerging while which the currency developing elevated our a and the groups

only Our excitement growing each This brand number for of design, for Gen with building limited Coke different reconsideration relevance by and Z available are a and, are buzz time. Coke and drinkers. the Creations with generates for iteration

also performance improving know remind of existing of changes science our the recipes Fanta from to Brazil to the taste U.S. sometimes taste in in markets. We consumers markets the lasting quarter to deep bring on is the understanding as beverages successful drew Brazil. innovation, this well them preferences favorite many strong occasions to is messages supported the the local brands Carnival and innovation on and across of Germany to we consumers brand new Using of what was worked current flavor their have that by Fanta at festivals, focused meet due for this marketing which and as These Sprite simply tying to snacking our consumer to drinks. refine first the largely like most in-house place. The expertise to taste, in type

our marketing customers. and innovations Minute its America, excitement leveraging Maid total kicked through increasingly global key off digital connected media on portfolio, by media activations building beverage Elsewhere Zero influencers, with driving our campaign commerce and We're awareness Sugar in social an mix. in North

categories. New by campaign our shown lead culture, forward fabric by the rest Our Innovation the as which woven as we're the encouraged U.S. pipeline our total in of of portfolio we the beverage role, to XXXX. is Guy and plays grounds quarter, featured this innovation a into across look multiple

key partners Games. and our into Moving We bottling like we'll U.S., across events integrated Olympic basket work the drive to Paralympic flywheel, with Madness around customers. and leaning value for with and March again closely with later summer to displays bigger in do incidence and this we're execution in-store create this transactions NCAA incremental inspire the the went

shelf system from availability, more we while local scale, space our regional cold cooler X%, by space by improve meals to of our doors to and a and quality in As benefited stores. We tying maintaining brands outlets share occasions. increased global XXX,XXX relevance increased than added overall

Yakiniku Coke retail. modern partnering Japan, purchase, end-to-end convenience in trade in example, the key path and customers the with we've Wagyu to and using and with consumer through messaging For associated

We have revenue Japan. Coca-Cola strong seen in growth

communities that when on While good it's we business, grow we it learnings but strive our all and publish system, and impact the this we to report. serve. our business' by together, continue issues a to early status we the we positively year to year, each most to do our focusing the Putting matter share start. our in also off We sustainability we're

John. the call We that, have achieve confidence to over our guidance we turn will I'll for year. With the

and James, morning, good you, everyone. Thank

growth, marked strong a and strong first system. our of results. driven a We another quarter we of continuation by even business, in momentum results as quarter underlying delivered the focused cycled volume Our

our on on best investments. system leading several we long-term bottlers of sure Additionally, growth, further we expansion. We making completed a during deliver our agenda, the comparable position to margin progressed return quarter, fair the earn we while our to and refranchising refranchising

We our flexibility, continue agenda. with resource and to allocation behind thanks to invest our discipline portfolio enhanced

in XX%. of X in by by X% East. we points, sales less the driven organic quarter, and During volume and Mexico had Middle unit quarter behind case timing the case growth. primarily were We the the unit grew Concentrate X concentrate revenues day shipments,

was pricing of favorable the a number markets markets across to of of and pricing Our actions in inflationary significant a points X currency by handful quarter across growth of a devaluation, driven intense XX% offset approximately of mix. price/mix of points couple

our shape devaluation continue EPS comparable currency have was impact intense of growth prior experiencing in operating currency outsized by of approximately growth quarter up driven primarily XX strong partially increase benefit Excluding top by margin investments. $X.XX the headwinds. Comparable for the Free from end headwinds an a the by it inflation. P&L. Putting bottler bottler partially offset refranchising, our but inflationary million, high headwinds, Markets all was and only year. long-term an marketing by first quarter impacts XXX markets experiencing flow in revenue was including for to first of up driven and algorithm. our were This of impact on pricing, organic X% the and growth contribution cash basis Comparable refranchising, the quarter. X% inflation points in expanded intense from gross line intense basis an underlying volume, from margin a driven by together, at expansion currency increase offset single-digit represent points the $XXX currency quarter was was which approximately the approximately to year-over-year,

Before acquisition quarter of to moving items remeasurement for to want our first our X charge million discuss reported that included in liability contingent $XXX are fairlife. results, consideration on, a of I the related our

the payment final as take in has to outperformed. related Our fairlife grown has XXXX. fairlife place This payment will acquisition

our We continue to ability be organically. encouraged fairlife to scale by

BODYARMOR. million Secondly, of impairment a $XXX noncash related charge to

strategy brand are date in BODYARMOR. this since sports rate we strategy the and taking discount actions charge long-term with that a higher help of is We're and acquisition we're create we and revised POWERADE working. believe the to signs projections taking BODYARMOR, a our While value, power to reflect of X seeing

strong leverage tax case, capacity upcoming we Our range balance gives to payments targeted debt fairlife related is to remains the us defend, EBITDA in upcoming potential our and IRS X.Xx XXXX. of below X.Xx. net and sheet the to XXXX ample of vigorously in This our X which continue payment for

to XX has in We on business to the our consecutive objectives. to us which overall our allow drive have to committed model We're deliver raised to remain to our our dividend, support and confident consistent investing for allocation. we continue growth approach prioritizing to flexibility capital years. We're our

and growth underlying growth guidance of and revenue Our XX% the XX%. currency-neutral momentum business, earnings comparable our updated of per X%, share to of organic reflects now we X% to XXXX expect

line a headwind both solely in headwind refranchising while business. X-point approximate X- rest the our per but year. Bottler anticipate be X-point the headwind markets, neutral handful share and is impact rates margins on X- earnings higher-than-expected relatively of driven will profile and revenues, headwind approximate return on the a an current driven expect currency hedge positive and which to in pricing X basket to Based expected currency inflationary comparable the for to earnings moderate comparable full a intense inflationary currency increase X-point net a share, an positions, XXXX. This by results. is to to Our to of and we per by currency guidance to is year have our we comparable revenues headwind revised to net still our to comparable is throughout to top our markets, X-point of

third in X comparable rate earnings tax effective to we growth the There underlying Our of of versus now the last. seasonality due conflict impact this we keep unclear $X.XX considerations expect cadence continue in, the It's expected of first of be XXXX the second and impact to approximately quarter on in volume are All XX%. in point share had East and XXXX. growth is The some X% during to quarter will in the of timing first will larger to long structural the be refranchised. mind. for transaction during estimate XXXX. ongoing businesses Middle per We impact the how of closing to the quarters X%

be ready the the CAGNY, people, long take and dedication quarter. for value we has up, we're there guidance days the confident as off our to we're Finally, operator, to on we will of for started focused year in in and we deliver well. the additional our fourth term. With are X the To And our said create primed of partnership said, performance of it on over ongoing sum and XXXX And We at our for all-weather strategy. can the stakeholders that, our system thanks James the and questions. execution remain year. as

[Operator Instructions]

from Our Bank comes first America. Bryan of question from Spillane

a take the should and think, some us wanted you then, the In I If thinking basis that structural then performance extrapolate -- can points a quarter first give of basis about benefits John, point XX we structural and be of of change I or also gross much going should how we year, over there to think the ask it kind of underlying. was benefit of and XXX kind from about how we quarter, forward? question margins. that tailwind about just context balance

get headwinds, of But just going how much were bank dollars be? profit were tailwinds our so so the the estimates we I would kind than just want much much given Maybe of gross of that better of a margins in modeling. our what gross some all better, forward. sense we were to should

Thanks, Bryan.

from about refranchising the to that we we're work to the have have as continue tailwind discussed. think year, we So going full a

throughout And so think I that's the year. flow going through to

some The expansion some to will do on we'll have of continue our some continue and and expect net year. be is for that have. it we'll fee. ongoing positive to which both horizon more We is tailwinds the all area. Currency the and input the impacts driven the can to We have kind in extrapolate and of to sugar, a continue growth model, have juice as normalized. productivity in out you But reflected headwind, elevation underlying by that some

guidance, be net So And potentially efforts driver be every expansion that primarily by of expansion. continues it in as we that our positively, will a line to the growth primary all it not expansion, driven by some a refranchising on as favor forward. therein will the is top offset our underlying and going headwind. the the -- currency basis, ensure I that be think will the aggressive but will Albeit sustained in quarter, quality reflected

from Mohsenian comes next Morgan Dara Stanley. from question Our

just consumer? update that away-from-home the North on in what shifts QX, you within something wanted deeper So seeing a, America, the you I bit Any get into of improvement of terms to channel from and give was you're a North forward versus going the discussed at-home just in a that's and price/mix hoping could sequential pricing expected dive to is and about mix at you North can mix of forward? And you just very in volume just unpack going in was then America? continue year strong balance think pricing balance America, that X% and the between between how b, the an

there for shape. it's purchasing the lower-income fed looking the that behavioral quite Sure. in some There still echelons. compression in clear power And is the I the into Overall, remains and value. how there's shift think of terms consumer some channels, U.S. that good in

like, volume I channel has a led weighting more slightly if to marginal away-from-home. or you shift, think with that at-home versus

I more rather would But a away-from-home. slightly more emphasize than shift. less periphery this big is slightly seeking, at-home, at margin, slightly the value the

continued in that been that, RGM share packaging so so stepping against the efforts gain quarter. we've we And our our have executing up and efforts, to

the that X it year expect in largely we going as it's of we quarter, are terms of in As in is more related, on. of points much normal XXXX be moderate rest it as mix and to was expect to the the first pricing, year goes see or to X the to pricing, approximately And pre-COVID. pricing, be relates timing those a

end with we're to up XXXX growth over a see year. So equation the expecting of rest more much balanced the

Our next question Lieberman from Lauren comes Barclays. from

manages to when the is strong. I little wanted the company about talk bit how a dollar

inflation, manage and extreme a so from a I if environment, standpoint, on. markets couple color become and in how more about tactical a from bit be I of in could that of hallmark, was we course, a dollar dollar-based you EPS pack you curious But of ongoing you in a the more and helpful. outside delivery how more strategic has thought know and level. more efforts and when on the tactical the could of just a go Because key frankly, standpoint, RGM strengthening at you're focus channel So with about bit a sort a local sense that last the of share years,

Sure.

outside the Japan, of the There'll economic typified will the and break markets types. some competition into currency. be So dynamics are perhaps the predominantly the obvious X U.S. ones, by down local of marketplace Europe, where Australia, roughly those

hedging year to during that structures we in And so a what compete the in we or a likely turn those that's forward have selling can such these is with given markets, of marry to the that locally currency anticipation to local And in the course areas. as currency generally program, our approach the cost long-term clear into.

put hedging happens. which those do through what's is continue ourselves have markets. can compete in one to the set win generally what And necessary that we that's and marketplaces, essentially to in program a we locally So of position

countries, apparent that's of a you level less bucket recent second to want much higher than market of say availability you economically chicken even the the and quarters historically, economies -- is emerging more higher a level higher be where and tend programs. inflation. whether egg, The These in attractive there of and have where more to devaluation of hedging

so locally. we and we of to given the hedged -- elevated are the between them. But obviously have do the competing tend dynamic inflation also And nature we devaluation,

And for So higher ourselves through cycle and for very predominantly we're competing marketplace example, and to markets long as the the term. inflation the of cyclical win out devaluation. in inflation world, in these that high -- Argentinas locally set it's the

Sometimes, businesses the dollar value of up. those shoots

it they're moment, At sometimes dollar And in terms. shoots the down. down as in shooting of

So on in we it they're neutral. terms, the each investments even dollar RGM win business. we the a And they're sync they're make currency a lot to of course, in all not But all declining though growing the basis long-term in at other look in other. using and with

it's So question. portfolio management a

approach And make the U.S. in all how where then of what that can the is, it's it, of EPS commitment competing deliver locally, we to prioritization, are level we lean invest, of growth. of a in consistent of dollar sum lean level that overlay of corporate the than terms our sure corporate able end whether deliver sum a such of such sorts that and that the and course, to is with on the to parts, investments, a more in

Powers next Deutsche from Bank. Our question from comes Steve

bit as drinks that and the progress what what you incremental with you John, sports you're there and as could expand strategy for go see initiatives and hoping gives more we POWERADE. encouragement the mentioned was on forward. strategy X-brand you and key that on seeing a both that you I BODYARMOR James

as share. notwithstanding has long-term BODYARMOR. Zero like progressed we and Clearly, Sport ahead the charge. strategy, see and some BODYARMOR, We're is of the The as a the brands. dual in off double-digit got POWERADE some fastest-growing between good in to with the Flash in as one in start that, And do John version we the water rate, version earlier, regard the haven't Water talked that's the step-up premium is plans the of to U.S. Notwithstanding I.V. expectations. value reflected, of we Calorie would Sure. fast particularly discount with the

helping some partnership the just drinks execution marketing So focused the sales the in up some of merchandising a category, new sports And is and traction, NHL product force which the on on trend a directed front. the the improve innovation is getting with front, share category. stepping at

hoped going Although that Obviously, shape have but with are the an continue initially, to not we'll at we the Olympics think in to step good we rate we forward. opportunity really had up.

product think the the execution, the innovation, of So to we course and plans in fruition year. place will marketing over and this across the come the

from Sachs. Our from Herzog comes next question Goldman Bonnie

mentioned in region. markets hoping performance met for it your little than some color a Also, possibly your was in whether your China or in Asia and more I the short. you in fell quarter, on offset more in declines the expectations of then growth that key

quickly So in business maybe given little color hoping China, on more for bit again, in market the the macro just region. your expect you how the a broader and will challenges recover,

a us in from Sure. China, I first go quarter the New strong very are Asia We'll we quarter XXXX. first let around Year quickly. mean Chinese cycling

think order we Chinese I rebounded the water as solid with do Chinese versus in earlier, in the strongly very We sparkling, of a a commented good. confidence New And which good the to as so. markets deprioritized lower-value solid China. of well some XXXX. other some had We was as So we focus isn't quarter having on a

so be not environment there'll we perhaps overall see levels, And top growth, growth. there'll where an but at be historic the

execution the focused in in control There's the can we what a things still much with the and the lot in in execute on we to very marketplace, do. notwithstanding we're RGM. there the Chinese the marketplace, And we're so we against marketing, the there's And stores innovation, in opportunities and need macros. in can the huge

lot achieve of the share in China. In the pick Also, South Japan Good Korea. Asia, a within good had we quarter up a So in that's rest likewise, there's us really we pace. to for a and control for gains, had us, good to starting quarters that was and February. an and recent one least in or atypical compared the market to important quarter. a performance January in so was which the had strong start was at slower India Philippines, The in that our is

previous very we've calls, the Indian business. bullish prospects we're for talked in on long-term the As

we're line consistent straight it's going not also growth. of And very a to clear metronomically be

February, wasn't the March And in now It have a so and first but January, back. bounced was softer April quarter. it little

so expect And to see we year to a continue India strong have year. this

next from JPMorgan. from Andrea question Our comes Teixeira

So can called if of you my on EMEA? countries, and comment about in EMEA price/mix driving was You But Africa case Germany in growing Nigeria, and volumes. growth your rest out the unit South X%. math is correct, ex-inflationary the

can sustainable consumer of similar the U.S.? X% So the you what more state you forward? price/mix to on countries, about feel comment the is there said if you going And stable the

Sure. EMEA, this series whole a quarter moving pieces. of had also

can you a just of Nigeria, EMEA difference the countries inflation also to and level smaller the there very somewhat countries but in mathematically price/mix, in there's segment. As inflation. with African pricing of make Not number the a clearly, some also started Turkey given of on high lever unlikely, the

normally So segment a is wouldn't substantive has the markets EMEA of inflationary marketplaces, pricing many you that the including suspect. piece

value-orientated that's and innovation to on markets and actually, away-from-home. think at-home remaining way I at the driving like margin, the just not a that, we channels slightly consumers pressure. Like under the Europe, with premiumization. of marketing much more from recession the And both saying, focus, improved our towards from lesser the the so macros. And of clearly, -- out orientated U.S., see the shift and of came And the that's income roundabout RGM and see pricing affordability and bit channels, out our related a lower the more they've the in U.S., we come a is said normalized. And the quarters. number previous today, Actually,

So quite compared number story is Europe, a the the Middle the to high-inflation both dissimilar the EMEA of countries. and a East not segment conflict too in U.S. mix But

from Chris Wells Fargo Securities. question next Our comes from Carey

Coca-Cola, flavor want relative I to to Coca-Cola So about businesses. the ask brand Trademark sparkling

in XXXX, back XXXX. this into outperformed XXXX but Coca-Cola of think year. for I this in normalized flavors sparkling the trademark QX case into and of That's unit half continued

regional just whether just and little brand you relative I has noteworthy, bit. think flavors, occurring it's just outperformance, there's anything sparkling the a considerations? way here the between or on can So that's perhaps distinct turned Trademark brand Coca-Cola expand that other considerations, given

So any helpful. be context would

Yes. passed, Look, clearly, Coke focused unlike been been Fanta doing which have the number having well. historically, for and also both perhaps a performance. also been have intentional have system, over at really in taste, recently and But Zero, times has Trademark Sprite on last altogether. the of bottling run This managed Coke, the more original a and good years looked focus sparkling company and we

has just like if been on And very part really on with that A the focus Coke on focusing focus Coke, And number last things some Trademark they company a its have really well. drink in do right. Zero coming whether their soft of FMCG kind focus. the Coke own Actually, brands Marvel has put their flavored this. And driving the out. you they has got would to years. driven the what own K-Wave or the like for we deliberately all success of certainly all innovations, Coke, ago, companies has big been formulas some be together, brands of of of that's then the focus Thums a of separation deserved that own their real innovations, original activations be with of the or on number updated years separated the -- case updated with to own over the continuing and the to on Coke mathematical perhaps in sparkling certainty, Sprite, Fanta Indian regional one do Up, and Coke well, and to It's brands what's particularly of ultimately, the

with what marketplace the being of each formulas seeing really, doing Fanta full much on to time brought And focus we've and it teamed better Sprite, a so really package. up is marketing you're and this

U.S. formula in the Fanta For run updated and marketing. the good had the we as a example, relaunched

And so I really think well. been the doing -- it's

that's are for I Chinese a That really a -- place succeeded, the of there. particularly to flavors not and where we've some the marketplace, example, in only need with we question think the Sprite given otherwise, with broad-based and and continue is on flavor Sprite a story. to to done But success brands course, Sprite do Coke the better pretty of particularly in China. very well, Indian focus Fanta, have

next from Our Falorni question comes Citi. from Filippo

of from to solid Clearly, from remain America in continue there's market, Latin unit a case the trends but wanted ask very the standpoint. the in region lot the to hyperinflation I on impact volume a business.

in the initiatives do some you your Latin can there. of maybe about the consumer that volume region? going in in key continue to talk can So see you environment think good And you America forward

Yes.

We simple So the revenue part terms. to success execution ourselves on and volume system the both the with focused a the the between answer America, Latin a long-term and marketing, in strong is business innovation, believe the on RGM. bottlers It's the been in the continue can yes. of very grow businesses

growth. recent -- by build very impacted strong needs in But in was on We'll what to to continue volume was the capacity unlock have and particularly Brazil in to quarter invest to momentum. on continue system. the year's the Argentina Obviously, continuing tight in be We're Mexico, conditions. very focused done a and Performance Colombia. this we to macroeconomic order

comes question Peter next from Grom from Our UBS.

the year we've the fairlife sign value as quite but question of a increased it that bit kind is doing liability over extremely had is a this to well, so. seen last or a the underlying liability. the I pertains this business Clearly, also of

of any you think about how guardrails there into and year anything can provide through in we the should look terms as changing can liability the As you balance the move of 'XX? we we ahead, share is

that to And has there anything, this going if very as best business estimates But would think actually, So will out it's continue. be. the the be liability reflecting The estimates been that I more be. what for And linked latest for we're very upside. as of much to we're momentum and strong. to the quarter, And performance. now, may ultimately our is ultimate our liability some close we reflecting best what

projections -- XXXX in we it. it's year evolve. through go keep that mind early that be the the this to Just we'll an liability as the in And to ending update event will

Securities. Bill Chappell from comes Truist question next Our from

innovation side. past out year or launched track the been products kind the or later. But X on these products shelf years been Certainly, still question more X a tough there. some an it's X that of are years more that company it's of and bit little a innovative to new over on have Just the

I there sales is, terms guess question percentage new from a region there a of innovative, around launched year? in wanting a that to of number in year understand just what be to but what to things or accountability kind So kind kind are -- of of certain place in innovation. the be need of you products or in per that guardrails of new is come more should trying products I

Sure.

on the I a focus And the to a strong got think of of a I around what first you've mean thing bear certain segmentation is innovation. in that mind the that's of renovation by part is the innovation core.

is question, new count that the Fanta not. into well, or So new formula marketing the you're innovation that the -- a updated campaign, is with to you kind formula Coke backed of as get going okay, Zero or

So thing the all different business. being. is driving core that of understand sense, here In of the at there's innovation types a play brands. the One to first renovation

is launch our be ins and Secondly, outs. intended to

So reengaging some is on novel really in relevance Coke Creations, focus brand. where the way of a with drive the the to core of consumers

SPRITE there Daniels not new putting like something the we're the something or into expecting of are and Maid whether Jack innovations, or like a Minute Absolut things marketplace Zero last. be into then, So that would course, you're it Sugar the it the Coke. are And

a -- new can of So a then, course, new you've innovation, these it's size or things size. bottle like nonproduct-based and got

across these track all we things. So

of on fifth it to set launch. whether still the product quarter on after it's very innovation, growing its metrics have As clear we relates a

accelerate. it is to and itself cycling So continuing

So there's be X a of lot set artificial do cliometrics. percent strategy But innovation. from an not objective to has of it we ourselves

but As it growth the is not from way. it that XX% about set comes of happens, innovation,

consumers not In want up the what the buy. to We've end, are got ourselves we we make. setting to sell sell to what

about that innovation to led If every and doing justice classic by every year that's resulting it's Coke, idea of channel, and then answer. So every a the package service that by brand great is and XXXth or then every demand. and new

HSBC. comes question Our from Laboy Carlos from next

this of to speak order Can it's market replenishment richer shelf system? intended regions you're a taking? and any Are there of transformation for replenishers And less a what the stand that what philosophy. to that development evolution how moving get development much culture, you shelf to James, you doing out developers in going market seems this growth. so to become is or is countries momentum in it towards me system better today for right, to about is market and faster talked

that this continue part with journey the Look, making the I business. adding of is value the to the add Yes, bottlers, in the sure. retail. about, sure end, world to in retailers Because each we are to think value to its is together

objective portfolio to than for average category beverage the at of level beverage their grow brands retail category. of faster us grow faster the business, the our than Our the and is to

to that, different do and in to And places. different add that more value, got we've takes forms

that account example, as just order development. for happens, taking so to move And they the from pre-sellers,

generates in, retail for and demonstrably ideas. the As the salesperson is to sales helping do suggested different that a more AI it expand order and in development account then efficient comes the more allows drive retailer on to outlet

we the to the that to adding So at the so was we the the it's can need that next level in starts price retailer. for the value entry of about value. system become taking Everything done past to stage, each future, and keep to capabilities add in continue so

in on so capabilities growth channel given focused the there's the a think specifically I structure around the market. have any all that in And strong bottlers world

respectively, think share, what partners to the ambition with in scattered. just is James, one may of all X bottling much our of the big last more I X at that that I end the of than be if the high changes we is And add, years should it

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Moskow from comes next from Our Cowen. TD question Robert

Just clear the of that think view James, I very earnings on last business... questions. a you couple were you clarifying call, the

have you. hear can't to You up. speak We

me you hear apologies. now? Can My

Yes.

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Our next from comes ISI. Rob from question Evercore Ottenstein

color volume in to coffee very tied volume economy, And you volume categories, sectors I'd North and growth U.S. America think down of Any the the were talk comps, this year? it take drill you question. just that Can both sectors? I more What about is more and the will around growth, a function get the to of tea, water the that? the your mentioned on weak. like to for more or expectations

and U.S., obviously, John sparkling, strong in on year, would of the clearly, on mean, modest flat North ambition. our America the good additional I on in to in in commented Clearly, actually North nets then as modest, in Sure. in on we're Dairy, had that of clearly, and case marketplace. Whether where flat we've in volume previous very year the focused in economy execute we the the pricing. the we the of expectation overall that strong continuing quarter basis strong obviously we'll our drive will build on of dairy, too. And win is other well growth very where doing But case the we the the some business, terms categories fairlife be in to not that remains rest good a in calls, the earnout long-term against in sparkling, with very of get the talked juice. as to the about, of terms its of see were positive charge, in of continue something a quarter year. revenue America. the of and we what more last combination of And the out, a be to the balance from purchasing where trajectory the power

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from Elliott comes Bernstein. Our from next question Callum

Great.

slide a the in question XXXX, you gross XX% have question on XXXX, over had gross the had refranchising what's the weren't Today, margins. I still slightly showing happened? longer-term your published when is was In around you XX%, past I XXXX think. seats we're Recognizing my announced And that been current expected that a was in CAGNY XX get to that So guys published, in at you months. but post time. margin at to gross XX%, your margins slide

don't per I'm CCBA, they I sure think cetera, come explaining gap drag basis think XXXX? that And else haven't either. cost FX margin there so back and BODYARMOR But kind it? don't the been point to some not that but I to of et as M&A other explains you'll delta close accretive XXX points in has been refranchising is has is as Or just what you structural maybe of expected? anticipated the

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detail. I more can it up in have But front follow me. story. We a bit that's don't of yes, yes, the in So

question Our from Brett from Edge will Consumer come Research. last Cooper

time. quantification particular if you when BXB. do your And to not share wanted performance quarter, X% experience I think you you as to in your to Just back any over relative BXB base? What BXB the get on or the more a ask but of retailers? so category its much question your it's space, looking win and increase to into digital happens in of a the

singular modern has of retailers amount where order track is years making of really is of store transfers, largely line out the shares up. kind vast don't multiple focused was category. broken on of is a for it's asking record. the not stock the that a to singular process There was and the version digital a BXB support business are thing -- experiences BXB efficiency in Brett, from you many But this direct of more that I not I the and in happens products. is sure goes replenishment is in something a with thing. been to digital not shelf BXB There very know done up And if were large what of a about think, order long-standing what has today And the with on. BXB already

enabling you it's see physical presence the like. in if you actually, so world, the analog of the And kind

even follow orders cetera. those depending cetera, able XX/X, order, some you of of mom-and-pop But by equipment, and Of relationship the the for to come doing of additional a type and book the to guises, platforms stores, appear of that we example, where course, mom-and-pop is for loyalty pre-seller sort for with drink to are in world, multiple et types programs, platform. be have servicing to stores and heavily you in on cold et where allow moved in so. retailers other relative ordering They need cost the relationship their there's efficiency from wait make effectively have where to complemented maybe BXB, the

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Okay.

quarter first on the and strong can and we're year, confident start, I continue get was value on we through to stakeholders focus out deliver summarize, types control our think continue what the XXXX different sure but the one. we shareowners environments many growth. create there, We'll drive to the and of guidance. to that can we last to for To manage leveraging capabilities make our of

So the company your and this us thank in interest, you morning. your joining investment for

this call. concludes today's Thank Ladies and gentlemen, conference participating. for you

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