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Coca-Cola (KO) is bubbling higher after reporting its Q1 results this morning. The beverage giant continues its long streak of EPS beats, while revenue growth accelerated, increasing 11.4% yr/yr to $12.47 bln, nicely above expectations and marking its strongest growth since 2Q22. Additionally, KO raised its FY26 core EPS growth outlook to +8-9% from +7-8% and reaffirmed its organic revenue growth outlook of +4-5%.

• While organic revenue growth of +10% marked a sharp acceleration, it was aided by concentrate sales running ahead of unit case volume due to six extra days and shipment timing. Encouragingly, unit case volume still improved to +3% from +1% in Q4, led by China, the U.S., and India, with growth across every segment, though Easter timing provided a modest half-point benefit.
• North America was particularly strong, with organic revenue up +12% and unit case volume increasing +4% from +1% in Q4, primarily driven by Coca-Cola and water, sports, coffee, and tea.
• Asia Pacific organic revenue increased +5%, with volume also +5% (flat in Q4), while EMEA organic revenue rose +11% on +2% volume (+2% in Q4). Latin America organic revenue increased +9%, with volume +1% (+2% in Q4).
• Category performance was led by continued strength in Coca-Cola Zero Sugar, which grew volume +13%, along with +6% growth in Diet Coke/Coca-Cola Light, +3% growth in sparkling flavors, +5% growth in water, and +8% growth in tea.
• Comparable operating margin expanded 70 bps to 34.5%, supported by organic revenue growth and lower operating expenses, partially offset by higher input costs and increased marketing investment.
• Braun tied KO's stronger volume and share performance to its push for more balanced, consumer-led growth. At the same time, KO acknowledged that some consumers remain pressured by inflation and macro uncertainty, further reinforcing the importance of affordability, tailored offerings, and targeted innovation.

Briefing.com Analyst Insight

This was a good start to FY26 for KO and recently appointed CEO Henrique Braun. KO continues to put the consumer at the center of its strategy, which appears to be supporting the improvement in volumes. While North America and Asia pacific stood out with a sharp acceleration,the strength was not isolated, as KO grew volume across all segments and extended its streak of overall value share gains to 20 consecutive quarters. Comparable operating margin also expanded despite higher input costs and increased marketing investment, suggesting KO is balancing reinvestment with better expense discipline and operating leverage. The reaffirmed organic revenue outlook suggests growth should normalize from here, but the raised EPS outlook still adds support, showing KO is converting stronger volume and margin gains into better earnings. Overall, the quarter was an encouraging read on underlying demand, with improving volume trends and continued share gains supporting the view that KO's consumer-led strategy is gaining traction.