A Coca-Cola official points to fluctuating demand and warns of Middle East risks.
Coca-Cola Company KO | 0.00 |
June 4 (Reuters) - Coca-Cola Chief Financial Officer John Murphy said at a conference on Thursday that the company is adjusting its strategies to keep its beverage prices affordable and attractive to consumers as demand continues to vary across different income brackets.
The beverage company, which raised its annual profit target in April, said it was handling the turmoil caused by the US-Israeli war on Iran "not ideally, but without fear or anxiety."
"The outlook... regarding the situation in the Middle East remains uncertain," Murphy told investors during a conference organized by Deutsche Bank in Paris, adding that this "will be one of the topics on all our agendas as we approach 2027."
The latest earnings results from major US retailers indicate that consumer spending remains robust, but consumers are spending more selectively, as their budgets are affected by rising fuel costs related to the conflict in Iran and persistent inflation.
Murphy adopted the same view, noting that "the narrative that consumers are resilient is an accurate one... because they are not all the same."
He added that segments of Coca-Cola's customer base are under pressure, particularly those with annual incomes between $50,000 and $60,000, noting that "we have segments... that are under pressure, and we have a choice to stay connected with them or not."
He said, "The calculations are very clear. It's not working... they simply don't have the purchasing power."
The company's stock rose by about 1.5 percent in pre-market trading.
