01—Abstract
Summary
Summary of the 8-K filed April 28, 2026. Cited figures are marked; the original filing is the authoritative source.
The Coca-Cola Company (KO) reported first quarter 2026 results on April 28, 2026, showing strong top- and bottom-line growth.
Reported net revenues rose 12% to $12.5 billiona and organic revenues (non-GAAP) grew 10%, driven by an 8% increase in concentrate sales and 2% price/mix, with unit case volume up 3%. Note that concentrate sales ran 5 points ahead of volume largely due to six extra days in the quarter, so the headline growth is flattered by calendar timing and partly offset by the timing of concentrate shipments. Reported operating income rose 19% to $4.36 billion, with operating margin expanding to 35.0% from 32.9%; comparable operating margin (non-GAAP) improved to 34.5% from 33.8%.
Reported EPS grew 18% to $0.91b and comparable EPS grew 18% to $0.86, though comparable currency-neutral EPS growth of 15% and the 6-point reported currency tailwind mean much of the reported EPS gain came from favorable FX. Management updated several full-year 2026 items. Comparable EPS growth guidance of 8% to 9% (versus $3.00 in 2025) and the underlying effective tax rate of 19.9% were updated, and the company now assumes a roughly 4% revenue headwind and roughly 1% EPS headwind from the pending sale of Coca-Cola Beverages Africa (CCBA), expected to close in the second half of 2026 subject to regulatory approvals.
Organic revenue growth guidance of 4% to 5% and free cash flow guidance of about $12.2 billionc were unchanged. Management's commentary focused on balanced growth, with price/mix and unit volume both emphasized and lower operating expenses supporting margins despite higher input costs and increased marketing investment. Asia Pacific was the notable weak spot, with comparable currency-neutral operating income down 17% on unfavorable mix and affordability pricing.
From a cash flow perspective, free cash flow was $1.8 billiond in the quarter, while the balance sheet showed total debt declining (current maturities of long-term debt rose to $4.5 billion, and long-term debt fell to $39.1 billion), and dividends paid of $2.3 billion were significantly higher than the prior year's $89 million, reflecting the timing of the annual dividend payment. Investors should weigh the strong headline results against calendar-day benefits, FX tailwinds, and the pending CCBA divestiture when assessing the underlying trajectory.
02—Key points
Key Highlights
- Net revenues up 12% to $12.5B; organic revenues (non-GAAP) up 10%, with unit case volume up 3% and price/mix up 2%
- Reported operating margin expanded 207 bps to 35.0%; comparable operating margin (non-GAAP) rose 70 bps to 34.5%
- Reported EPS up 18% to $0.91; comparable EPS up 18% to $0.86, but comparable currency-neutral EPS grew 15% after a 3-point FX tailwind
- Six additional days in Q1 2026 inflated concentrate sales (up 8%, 5 points ahead of volume), a timing benefit that will reverse in Q4 2026
- Full-year comparable EPS growth guidance of 8% to 9% (vs. $3.00 in 2025) was updated; organic revenue growth of 4% to 5% and FCF of ~$12.2B were reaffirmed
- Pending CCBA sale (expected H2 2026) implies ~4% revenue and ~1% EPS headwind for 2026, with Q2 implying ~1% revenue and ~1% EPS headwind
- Asia Pacific was the weak spot: comparable currency-neutral operating income fell 17% on unfavorable mix, affordability pricing, and higher input and marketing costs
03—Questions
Frequently Asked Questions
How much of the EPS growth was driven by currency versus underlying performance?
Reported EPS grew 18%, which included a 6-point currency tailwind. Comparable EPS (non-GAAP) also grew 18%, with a 3-point currency tailwind, so comparable currency-neutral EPS grew 15%. Items impacting comparability contributed essentially nothing to EPS growth in the quarter. Investors should view the underlying constant-currency growth of roughly 15% as the more representative figure, though it still benefited from the extra six days in the quarter.
Did the extra days in the quarter materially boost results?
Yes. Management stated that first quarter 2026 included six additional days versus first quarter 2025, which pushed concentrate sales 5 points ahead of unit case volume. Unit case volume, which is computed on average daily sales, was not affected by the day count. Management also noted that fourth quarter 2026 will have six fewer days than the prior year, so this timing benefit is expected to reverse later in the year.
What is the impact of the pending Coca-Cola Beverages Africa sale on 2026 guidance?
The company assumes the pending sale of CCBA closes in the second half of 2026, subject to regulatory approvals. This implies an approximate 4% headwind to comparable net revenues and an approximate 1% headwind to comparable EPS growth for full-year 2026. Organic revenue guidance excludes this effect. The sale is expected to contribute roughly 1% revenue and 1% EPS headwind in the second quarter.
Why did Asia Pacific operating income decline, and is it a concern?
Asia Pacific reported operating income down 14% and comparable currency-neutral operating income down 17%. The decline was driven by price/mix down 6% from unfavorable mix and affordability initiatives, along with higher input costs and marketing investment. Despite 5% unit case volume growth, the segment's profitability weakened. Investors should monitor whether affordability-focused pricing is a temporary investment or a structural margin pressure in this region.
Is the company's cash flow and balance sheet position changing?
Operating cash flow was $2.0 billion and free cash flow was $1.8 billion in the quarter, compared with a large operating cash outflow in the prior year period. Dividends paid rose to $2.3 billion from $89 million, reflecting annual dividend timing. Total debt fell, with long-term debt declining to $39.1 billion from $42.1 billion, while current maturities rose to $4.5 billion. Full-year free cash flow guidance of about $12.2 billion was reaffirmed, implying most cash generation is expected later in the year.
04—Continue