What’s going on?
Coca-Cola reported better-than-expected earnings on Wednesday, as the drinks giant went to whatever lengths necessary to get noticed.
What does this mean?
Coke’s products have been in high demand ever since entertainment hotspots opened up again, but the company wanted even more attention last quarter: it just about doubled its marketing budget from last year, and recently launched a massive soda ad campaign for the first time in five years. And the blitz seems to have worked: the company’s organic revenue – without the effects of currency swings and acquisitions – grew by a better-than-expected 14% last quarter compared to the same time last year. The company upped its full-year profit outlook too, which could be why investors are craving Coke right now: they sent its shares up on Wednesday.
Why should I care?
For markets: It has to be Coke.
There might be another reason investors are keen on Coke: it’s a consumer staples company, meaning it sells goods that customers need no matter what. That bodes well in times like these, since it allows Coke to pass higher costs onto customers without losing them to competitors. And that’s exactly what it did: the company upped the average price of its products by 6% last quarter and still sold 6% more than the same time last year.
The bigger picture: Would you like a Coke with that?
Coke’s long-term partner McDonald’s has had a good few months too: the fast food giant announced on Wednesday that revenue was up last quarter by a better-than-expected 14% versus the same time the year before. That’s down to some canny reprioritizing: the entire restaurant industry has been struggling to find staff recently, so McDonald’s simply shifted its focus to delivering straight to peckish customers’ doors.
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Originally Posted on October 27, 2021 – Brand Gestures
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