Coca-Cola Co (NYSE:KO) stock rose 0.22% (As on February 14, 11:36:49 AM UTC-4, Source: Google Finance) after the company reported higher-than-expected revenue in the fourth quarter as growth in Mexico, Germany and other markets offset lower demand in the U.S. Net income fell 3% to $1.9 billion. Unit case volumes rose 2% in the quarter, led by sparkling soft drinks, juices and Coca-Cola Zero Sugar. Sports drinks, coffee and tea all saw lower demand. In North America, unit case volumes declined 1% as growing sales of juice, dairy and Coca-Cola were offset by falling demand for water, sports drinks, coffee and tea. Coke said its North American prices rose 8% in both the fourth quarter and the full year. Unit case volumes rose in Coke’s other global markets, although Coke said it did see some slowdown in demand due to the war in the Middle East. Several other big U.S. companies, including Starbucks and McDonald’s, have also reported disruptions in sales due to the war.  Free cash flow (non-GAAP) was $9.7 billion for the full year, an increase of $213 million versus the prior year.

Meanwhile, inflation is moderating in most markets, after a stretch in which the beverage maker relied on price hikes to drive higher revenue, as per the company. Further, the U.S. consumer has gone in two different directions. Those with more disposable income are buying Coke’s premium drinks, such as Fairlife milk, while those with tighter budgets are pulling back their spending and buying more value packs. Consumers in Europe and the U.S. had started switching to cheaper private-label juices and bottled water instead of buying its Simply and Smartwater brands. The organic revenues (non-GAAP) grew 12%. For the quarter, operating margin was 21.0% versus 20.5% in the prior year.

KO in the fourth quarter of FY 23 has reported the adjusted earnings per share of 49 cents, which is inline with the analysts’ estimates for the adjusted earnings per share of 49 cents. The company had reported the adjusted revenue growth of 7 percent to $10.8 billion in the fourth quarter of FY 23, beating the analysts’ estimates for revenue of $10.7 billion, according to analysts polled by FactSet. Coke’s revenue got a 10% boost from higher prices in 2023, but the company said that was partly due to hyperinflationary conditions in a handful of markets like Argentina.

The company expects full-year organic revenue to grow at a more moderate pace of 6% to 7% this year, down from last year’s 12% growth.