Coca-Cola (NYSE: KO) surpassed Wall Street expectations in its third-quarter 2025 earnings, fueled by strong demand for zero-sugar beverages, Fairlife dairy products in the U.S., and sustained sales of its classic sodas in select international markets. Despite a challenging global economic environment, the beverage giant maintained its full-year revenue and profit guidance, highlighting the resilience of its diverse product portfolio. Shares of Coca-Cola rose 3% following the earnings announcement.

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Zero-Sugar and Affordable Pack Sizes Boost Sales

Coca-Cola executives emphasized that affordability and value remain key drivers of consumer demand. The company plans to roll out mini 7.5-ounce single-serve cans of its trademark cane sugar soda in U.S. convenience stores, priced under $2, targeting lower-income consumers.

“Affordability and value are really important, and we understand that. We need to find the right packages at the right price point to keep consumers in our base,” said CFO John Murphy in a Reuters interview.

At the same time, Coca-Cola is investing in premium zero-sugar beverages and energy drinks, such as Powerade, while expanding production capacity for Fairlife milk in the U.S. This dual strategy aims to capture both health-conscious consumers and those seeking premium beverage options.

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International Market Challenges

Coca-Cola faces growing local competition in key markets like India and China, where consumer preferences increasingly favor local brands. CEO James Quincey highlighted a broader shift toward local products, not solely driven by price sensitivity.

Unit volumes for the Europe, Middle East, and Africa (EMEA) region grew, remained flat in Latin America and North America, and declined by approximately 1% in the Asia Pacific region during Q3. CFO Murphy noted that growing demand for lower-calorie and health-conscious beverages has affected sales of the company’s trademark Coca-Cola.

“U.S. consumers are increasingly health-conscious, influenced by trends such as weight-loss medication use and broader wellness movements,” Murphy said.

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Recovery from Past Controversies

Coca-Cola’s signature soda is also rebounding from a previous boycott following viral reports alleging the company laid off Latino staff and reported them to Immigration and Customs Enforcement (ICE). Murphy clarified that Reuters found no public evidence supporting the ICE allegations and emphasized that the brand continues to recover from the incident.

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Strong Financial Performance

Coca-Cola reported third-quarter revenue of $12.46 billion, surpassing analysts’ estimates of $12.39 billion. Volume growth was 1%, improving from a 1% decline in the prior quarter, while pricing increased 6%, boosting profit margins.

Excluding one-off items, earnings per share (EPS) reached $0.82, beating estimates of $0.78. Like competitor PepsiCo, Coca-Cola benefits from a weaker U.S. dollar, which supports revenue and profit from its global operations.

“This year has been tougher than expected, particularly in engaging the Hispanic community, but demand is gradually recovering,” Murphy said.

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Strategic Focus Moving Forward

Coca-Cola continues to prioritize a combination of affordable product sizes, premium beverages, and international market growth. The company’s emphasis on zero-sugar drinks, premium energy products, and innovative single-serve formats positions it well to meet evolving consumer preferences while sustaining profitability.