Coca-Cola’s third-quarter organic sales increased by 6.0%, with adjusted operating profit growing by 8.0% and margins widening to 31.9%. The company maintained its 2025 outlook for organic sales growth and adjusted earnings per share, but raised its adjusted free cash flow estimate by 3%. Despite macro headwinds, Coca-Cola achieved 1% volume growth through innovation and consumer engagement, with a 2%-3% long-term volume growth target. Health-focused innovation, including zero-sugar recipes and functional benefits, will remain a priority. The company plans to raise its fair value estimate for Coca-Cola by 2%-3% due to stronger free cash flow. Coke’s brand equity and bottler partnerships are expected to remain strong, with emerging-market volume growth accelerating. Coca-Cola has accelerated refranchising efforts, selling stakes in bottling businesses in India and Africa. Bottling is anticipated to account for 5% of total sales after the deals close.

Read more at Morningstar: Innovation and Brand Strength Underpin Growth