Coca-Cola (KO) Earnings Preview — Q2 2026
Key Preview Takeaways
| Factor | Details |
|---|---|
| Consensus Q2 2026 Revenue | $13,134M (rounded to millions) |
| Consensus Q2 2026 EPS (GAAP) | $0.92 |
| Guidance for FY 2026 | Organic revenue growth of 4–5%; comparable EPS (non-GAAP) growth of 8–9% vs. $3.00 in 2025; FCF ~$12.2B |
| Q1 2026 Actuals | Revenue $12,472M (+12% YoY); Organic revenue +10%; Unit case volume +3%; Comparable EPS $0.86 (+18% YoY) |
| Q2 2025 Actuals | Revenue $12,535M (+1% YoY); Organic revenue +5%; Unit case volume -1%; Comparable EPS $0.87 (+4% YoY) |
| Q2 2026 Setup | Lapping a soft Q2 2025 (volume -1%); Q1 2026 had 6 extra days, Q2 2026 will see concentrate shipments lag unit cases by a couple points |
| Key Watch Areas | Volume/pricing balance, price/mix sustainability, margin progression, impact of Mexico sugar tax, fairlife ramp, FX tailwind, cost inflation (tea/coffee), execution in APAC and LatAm |
Summary and Conclusions
- Coca-Cola enters Q2 2026 earnings with strong momentum: Q1 2026 delivered double-digit top-line and bottom-line growth, with organic revenue up +10% and comparable EPS up +18%. The company gained value share for the 20th consecutive quarter.
- Guidance for FY 2026 was raised: Management now expects comparable EPS growth of 8–9% (prior: 7–8%), organic revenue growth of 4–5%, and a 1–2% currency tailwind to net revenues.
- Q2 2026 faces an easier volume comp: Q2 2025 saw unit case volume decline -1% and organic revenue growth of +5%. Q2 2026 consensus expects revenue of $13,134M (+5% YoY) and EPS of $0.92 (+6% YoY).
- Key factors to watch:
- Volume vs. price/mix: Q1 2026 saw balanced growth (volume +3%, price/mix +2%). Management is targeting a balanced algorithm for the year, but Q2 will see concentrate shipments lag unit cases by a couple points.
- Margin progression: Q1 2026 saw gross margin compression due to APAC inventory and commodity headwinds, but operating margin expanded. Watch for normalization as the year progresses.
- Mexico sugar tax: Management expects a headwind in early 2026, with mitigation efforts underway.
- Fairlife capacity: New capacity is ramping in Q2, expected to support further growth in North America.
- FX tailwind: Guidance assumes a 1–2% tailwind to net revenues and 3% to EPS for FY 2026.
- Cost inflation: Tea and coffee commodities remain a pressure point, but overall cost basket is described as manageable.
- Execution in APAC and LatAm: Both regions are key to volume growth; APAC saw strong Q1 volume but negative price/mix due to affordability initiatives.
Forward-Looking Consensus and Guidance
Q2 2026 Consensus Estimates
| Metric | Consensus Q2 2026 | Q2 2025 Actual | YoY Change (Consensus) |
|---|---|---|---|
| Revenue ($M) | $13,134 | $12,535 | +5% |
| EPS (GAAP) | $0.92 | $0.88 | +5% |
FY 2026 Company Guidance (as of Q1 2026)
| Metric | Guidance (FY 2026) | Notes |
|---|---|---|
| Organic Revenue Growth (non-GAAP) | 4% to 5% | No update from prior guidance |
| Comparable Net Revenues (non-GAAP) | 1% to 2% currency tailwind; ~4% headwind from acquisitions/divestitures | Assumes CCBA sale closes in H2 2026 |
| Underlying Effective Tax Rate (non-GAAP) | 19.9% | Lowered from 20.9% |
| Comparable Currency Neutral EPS ex-A&D | 6% to 7% growth | Excludes acquisitions/divestitures |
| Comparable EPS (non-GAAP) | 8% to 9% growth vs. $3.00 in 2025 | Includes ~3% currency tailwind, ~1% headwind from A&D |
| Free Cash Flow (non-GAAP) | ~$12.2B | $14.4B cash from ops less $2.2B capex |
| Q2 2026 Considerations | 1% currency tailwind, 1% headwind from A&D to net revenues; 3% currency tailwind, 1% headwind from A&D to EPS | Concentrate shipments expected to lag unit cases by a couple points |
Recent Actuals and Year-over-Year Comparables
Quarterly Results — Actuals
| Quarter | Revenue ($M) | Organic Revenue Growth | Unit Case Volume | Comparable EPS (non-GAAP) | Price/Mix | Key Notes |
|---|---|---|---|---|---|---|
| Q1 2026 | $12,472 | +10% | +3% | $0.86 (+18% YoY) | +2% | 6 extra days; strong volume; FX tailwind |
| Q4 2025 | $11,822 | +5% | +1% | $0.58 (+6% YoY) | +1% | 1 extra day; tough comp; FX headwind |
| Q3 2025 | $12,455 | +6% | +1% | $0.82 (+6% YoY) | +6% | FX headwind; volume inflection |
| Q2 2025 | $12,535 | +5% | -1% | $0.87 (+4% YoY) | +6% | Volume softness; tough comp |
Annual Results — Actuals
| Fiscal Year | Revenue ($M) | Organic Revenue Growth | Unit Case Volume | Comparable EPS (non-GAAP) | FCF (non-GAAP, $M) | Key Notes |
|---|---|---|---|---|---|---|
| 2025 | $47,941 | +5% | 0% | $3.00 (+4% YoY) | $11,365* | $6.1B fairlife payment excluded from FCF |
| 2024 | $47,061 | $2.88 |
What to Watch for in Q2 2026
1. Volume vs. Price/Mix Balance- Q1 2026 saw volume +3%, price/mix +2%. Management targets a balanced algorithm for FY 2026.
- Q2 2025 was a soft comp (volume -1%), so Q2 2026 should benefit from easier YoY comparison.
- Management expects concentrate shipments to lag unit cases by a couple points in Q2 2026.
2. Margin Progression- Q1 2026: Gross margin compressed due to APAC inventory and commodity headwinds, but operating margin expanded.
- Watch for normalization in gross margin as inventory effects fade and as cost inflation in tea/coffee is managed.
3. Mexico Sugar Tax Impact- Management expects a headwind in early 2026, with mitigation through RGM, marketing, and leveraging the World Cup activation.
- Q1 2026: Mexico volume declined, but offset by strength in Brazil and Central America.
4. Fairlife Capacity Ramp- New capacity in Webster, NY, is coming online in Q2 2026, expected to support further growth in North America.
- Management remains bullish on fairlife and expects continued category leadership.
5. FX Tailwind- Guidance assumes a 1–2% tailwind to net revenues and 3% to EPS for FY 2026.
- FX tailwind is driven by a weaker dollar in key emerging markets.
6. Cost Inflation and Commodity Pressures- Tea and coffee commodities remain a pressure point, but overall cost basket is described as manageable.
- Cross-enterprise procurement and RGM are key levers for managing cost pressures.
7. Execution in APAC and LatAm- APAC: Strong Q1 2026 volume growth (+5%), but negative price/mix (-6%) due to affordability initiatives.
- LatAm: Q1 2026 volume +1%, price/mix +1%, with geographic mix impacting price/mix.
Management Commentary and Tone
- Balanced Growth Focus: Management repeatedly emphasizes a balanced algorithm between volume and price/mix for 2026, with flexibility to adapt quarter-to-quarter.
- All-Weather Strategy: The company continues to highlight its ability to pivot and execute locally, leveraging digital, RGM, and strong bottler partnerships.
- Margin Expansion: Despite Q1 gross margin compression, management expects margin expansion for the full year, especially as the CCBA divestiture closes in H2 2026.
- Capital Allocation: Optionality is prioritized given the unresolved IRS tax case, but dividend growth and business reinvestment remain non-negotiable priorities.
