$Coca-Cola(KO)$ released its financial performance for the fourth quarter and full year of 2022. According to the report, the net revenue for Q4 increased by 7% year-on-year to $10.125 billion, exceeding market expectations of $9.92 billion. Net income attributable to company shareholders was $2.031 billion, a 16% decrease from $2.414 billion in the same period last year. The comparable earnings per share under the Non-GAAP accounting standard were $0.45, in line with market expectations.
The gross profit was $5.612 billion, a 4% year-on-year increase. Operating profit was $2.075 billion, a 24% year-on-year increase, and the operating profit margin was 20.5%, up from 17.7% in the same period last year.
The financial report shows that the company's Q4 revenue growth was driven by a 12% increase in pricing and sales of more expensive beverage combinations. However, the higher pricing hurt consumer demand for Coca-Cola products such as Simply Orange Juice and Fairlife Milk. The company stated that the Q4 unit case volume, excluding currency and price changes, decreased by 1% year-on-year. In addition, the financial report shows that the company's Q4 organic revenue increased by 15%, but exchange rates caused an 8-percentage-point negative impact.
By region, net revenue in Europe, the Middle East, and Africa decreased by 7% year-on-year, and unit case volume decreased by 5% year-on-year; net revenue in Latin America increased by 25% year-on-year, and unit case volume increased by 2% year-on-year; net revenue in North America increased by 14% year-on-year, and unit case volume remained the same year-on-year; net revenue in the Asia-Pacific region increased by 3% year-on-year, and unit case volume decreased by 1% year-on-year. Coca-Cola CEO James Quincey previously stated that European consumers are changing their consumption behavior in response to soaring inflation.
In the fourth quarter, Coca-Cola's carbonated soft drink department and water, sports, coffee, and tea department unit case volumes remained the same year-on-year. However, the unit case volume of zero-sugar Coca-Cola increased by 9% year-on-year, and the unit case volume of coffee increased by 11% year-on-year with the expansion of the Costa brand. However, the unit case volume of juice, value-added dairy, and plant-based beverage departments decreased by 7% year-on-year.
The full-year net revenue for 2022 was $43.004 billion, an 11% year-on-year increase, and the net income attributable to company shareholders was $9.542 billion, a 2% year-on-year decrease.
Looking ahead, Coca-Cola expects organic revenue to increase by 7% to 8% year-on-year in 2023, comparable revenue to increase by 3% to 5% year-on-year (market expectations are 3.9%), and comparable earnings per share under the Non-GAAP accounting standard to increase by 4% to 5% year-on-year (market expectations are 3%).
As a personal opinion, it is a positive sign for Coca-Cola to report an increase in revenue in the face of changing consumer behavior and increasing inflation, and I am optimistic about the company's future growth prospects.
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