Coca-Cola Company (The)
KO · NYSE
Next quarter
Expected to report Feb 9, 2027 — estimated from last year’s reporting date.
Consensus is $0.60 EPS for Dec 2026 across 8 estimates, ranging $0.59 to $0.61.
KO Sep 2026
- 4.60%
- $0.87
- $0.91
- —
- $13.38B
Reported results
- $13.38B
- $4.46B
- $4.01B
- $0.93
Highlights
- Earnings beat: Comparable EPS was $0.91, up 11% year over year and 4.6% above the $0.87 consensus; GAAP diluted EPS was $0.93, up 8% from $0.86.
- Volume-led growth: Unit case volume rose 5%, while organic revenue grew 7% to $13.4 billion; concentrate shipments ran 2 points ahead of volume due to timing.
- Guidance raised: Coca-Cola now expects 2026 organic revenue growth of at least 5%, comparable EPS growth of at least 11%, and free cash flow of at least $13.0 billion.
- Margin expansion: Reported operating margin increased to 33.4% from 32.0%; comparable margin reached 32.9% from 31.9%, despite higher marketing investment and operating costs.
- Mixed regional picture: Latin America organic revenue grew 16% and unit volume 6%; Asia Pacific volume rose 6% but price/mix fell 2%. North American volume was flat.
- Cash generation: Year-to-date operating cash flow was $12.5 billion and free cash flow was $11.4 billion, versus full-year guidance of at least $13.0 billion.
- Sequential comparison: Revenue was flat at $13.38 billion versus the prior quarter on file; operating income declined from $4.67 billion to $4.47 billion and diluted EPS from $1.03 to $0.93.
- Africa refranchising: The pending bottling-operations sale is assumed to close in Q4 and drives an expected 4-point headwind to comparable revenue and 3-point headwind to comparable EPS in that quarter.
Analysis
Coca-Cola’s third-quarter 2026 print paired a modest consensus beat with broad-based volume growth and a higher full-year outlook. Comparable EPS of $0.91 exceeded the $0.87 consensus by 4.6% and increased 11% year over year; GAAP diluted EPS was $0.93, up 8% from $0.86. Net revenue rose 7% to $13.38 billion, matching the prior quarter’s $13.38 billion, while reported operating income was $4.47 billion versus $4.67 billion sequentially and $3.98 billion a year ago. The reported EPS on file was $1.03 in the prior quarter.
The defining operating feature was volume: unit cases grew 5%, led by India, China, Mexico and Brazil, while organic revenue also advanced 7%. Price/mix contributed just 1%, as four points of pricing were offset by three points of unfavorable mix. Profitability nevertheless improved: reported operating margin expanded 140 basis points to 33.4%, and comparable margin rose 106 basis points to 32.9%, helped by revenue growth and currency but partly offset by higher marketing and operating expenses. Management raised 2026 targets to at least 5% organic revenue growth, 11% comparable EPS growth and $13.0 billion free cash flow. The outlook still includes a fourth-quarter drag from the planned Africa bottling refranchising and six fewer selling days.
Volume and revenue
Underlying growth came primarily from higher cases rather than price/mix. Unit case volume rose 5%, and organic revenue increased 7%; reported revenue was up 7% to $13.38 billion, including a 1-point currency benefit and a 1-point acquisition and divestiture headwind. Concentrate sales exceeded unit case volume by 2 points because of shipment timing, which management expects to reverse such that full-year concentrate shipments slightly trail cases.
- Pricing and mix: Price/mix rose 1%. Management cited four points of pricing actions offset by three points of unfavorable mix, principally geographic, category and investment timing.
- Portfolio trends: Sparkling soft drinks grew 5%, including 16% growth in Coca-Cola Zero Sugar; water, sports, coffee and tea grew 5%, led by water at 8%. Juice, value-added dairy and plant-based beverages were flat.
- Regional contrast: Latin America unit volume rose 6% and organic revenue 16%, supported by 7% price/mix. Asia Pacific volume grew 6%, but price/mix declined 2% on unfavorable mix. EMEA volume was up 5% and organic revenue 7%; North American volume was flat and organic revenue rose 3%.
Margins and earnings
Operating leverage supported higher margins even as Coca-Cola continued to increase brand spending. Reported operating income rose 12% to $4.47 billion; comparable currency-neutral operating income grew 8%. Reported margin increased 140 basis points to 33.4%, while comparable margin expanded 106 basis points to 32.9%. Management attributed underlying expansion to organic revenue growth and currency tailwinds, partly offset by higher operating expenses and increased marketing investment. Above-the-line marketing grew at a double-digit rate as the company prepared campaigns for 2027.
- EPS: Comparable EPS of $0.91 increased 11% year over year, including a 2-point currency benefit; currency-neutral comparable EPS grew 9%. GAAP diluted EPS was $0.93 versus $0.86 a year earlier.
- Reported-to-comparable context: The quarter included a $192 million charge for settlement costs and special termination benefits tied to a non-U.S. pension plan, as well as tax benefits and other comparability adjustments.
2026 outlook
Management raised its full-year expectations following the quarter. It now expects at least 5% organic revenue growth, at least 9% growth in comparable currency-neutral EPS excluding acquisitions and divestitures, and at least 11% growth in comparable EPS. The comparable EPS outlook includes an approximately 3-point currency tailwind and a 1-point headwind from acquisitions and divestitures. The underlying effective tax-rate estimate was reduced to 19.7% from 19.9%.
- Cash flow: Full-year free cash flow guidance increased to at least $13.0 billion, comprising at least $15.2 billion of operating cash flow and approximately $2.2 billion of capital expenditures; year-to-date free cash flow was $11.4 billion.
- Fourth quarter: Management expects slight destocking and six fewer selling days versus the prior-year quarter. The anticipated Africa bottling refranchising is expected to reduce comparable revenue growth by about 4 points and comparable EPS growth by about 3 points, with slight margin benefits.
- 2027 considerations: The planned Africa transaction is expected to be an approximately 8-point comparable revenue headwind and 2-point comparable EPS headwind for 2027. Management expects a slight currency headwind at current rates and will issue full-year guidance in February.
Cash and balance sheet
Cash generation was strong, with $12.47 billion of operating cash flow and $11.41 billion of free cash flow in the first nine months. The CFO attributed the improvement to business performance and working-capital progress, while noting capital spending was running behind typical timing and expected to catch up in Q4. Net debt leverage was 1.3 times EBITDA, below the company’s 2.0-to-2.5-times target range. Management described the stronger balance sheet as providing flexibility while it awaits the IRS litigation decision, with priorities of investing in the business and returning capital to shareholders.
IRS tax dispute
The pending transfer-pricing case remains a significant financial uncertainty. Coca-Cola has paid the IRS $6.0 billion, including interest, for the 2007–2009 assessment and is appealing the Tax Court ruling; the Eleventh Circuit heard the case in June 2026. The company says it continues to believe its tax positions will be sustained on appeal. If the IRS methodology were ultimately upheld and applied to later years, Coca-Cola estimates potential incremental tax and interest liabilities of approximately $14 billion for 2010–2025 as of year-end 2025, with roughly $1.4 billion of additional exposure accrued during the first nine months of 2026. The company had a $538 million tax reserve and $589 million of accrued interest receivable on the deposit at October 2.
