Coca-Cola (KO +3%) returned to volume growth in Q4, showing accelerated organic revenue growth and promising FY25 projections. After a weak Q3 with a 1% volume decline, KO reversed trends in August and September, gaining momentum into Q4.

• KO achieved 2% volume growth in Q4, boosting net revenue by 6% year-over-year to $11.54 billion, surpassing analyst expectations. Despite FX headwinds, organic revenue rose by 14% year-over-year, aided by a 9% price increase.
• Inflation impacted prices: 11% in EMEA, 12% in North America, and 23% in Latin America, with Argentina facing hyperinflation. Prices dropped by 5% in Asia Pacific. Despite this, volumes rose by 2% in Latin America, 1% in North America, stayed flat in EMEA, and increased by 6% in Asia Pacific.
• Compared to rival PepsiCo (PEP, Financial), KO showed better volume performance. PEP's total volumes rose by only 1% in Q4, with North American beverage volumes declining by 3% for the second consecutive quarter.
• KO improved non-GAAP operating margins by 90 basis points year-over-year to 24.0%, driven by organic revenue growth and offsetting higher input costs and currency headwinds. The company delivered an adjusted EPS of $0.55, continuing its trend of surpassing earnings estimates.
• For FY25, KO targets adjusted EPS growth of 2-3% year-over-year and organic sales growth of 5-6%, both slower than FY24's 7% and 12% growth, respectively. Currency fluctuations are expected to impact net revenues by 3-4 points and EPS by 6-7 points.

The consumer environment is stabilizing, aiding KO's Q4 performance. However, challenges remain as lower-income segments in the U.S. and Europe face pressure, and emerging markets experience volatility. Despite these hurdles, KO continues to leverage its brand strength, outperforming PEP.