Operating income rose 12.1% and margin reached 33.4%, helped by a 3-point currency tailwind and lower one-off charges 8-K. Management raised full-year comparable EPS growth to at least 11% (company-defined) from 9% to 10% 8-K.
The Coca-Cola Company · Fiscal Q3 2026 (quarter ended 2 Oct 2026) · Reported 27 Oct 2026 · US
Key figures
Billion USD | Q3 2026 | Q3 2025 | Change |
|---|---|---|---|
Revenue | 13.38 | 12.46 | +7.4 % |
Gross profit | 8.45 | 7.66 | +10.3 % |
Operating income | 4.46 | 3.98 | +12.1 % |
Net income | 4.01 | 3.70 | +8.5 % |
Gross margin | 63.2 % | 61.5 % | +1.7 pp |
Operating margin | 33.4 % | 32.0 % | +1.4 pp |
Net margin | 30.0 % | 29.7 % | +0.3 pp |
Figures in USD, as reported. Margins are computed from the reported lines.
Operating income grew faster than revenue, with currency and lower charges helping
Revenue rose 7.4% to $13.38B and operating income rose 12.1% to $4.46B, lifting operating margin to 33.4% from 32.0% a year earlier 8-K1324. Currency supplied 3 points of the operating income growth, and comparable currency neutral operating income (company-defined, non-GAAP) grew 8% 8-K.
Other operating charges fell to $10 million from $58 million a year earlier 21. A calculation that excludes the year-earlier $27 million indemnification charge puts operating income up 11.4% and the margin gain at 1.2 points, against 1.4 points reported; this is not a company figure 8-K2324. The $6 million North America modernization charge this quarter moves the margin change by 0.0 points 8-K.
Gross margin widened 1.7 points, but marketing absorbed part of the gain
Gross margin was 63.2% against 61.5% a year earlier 20. The 10-Q attributes the increase to pricing initiatives, currency, commodity cost stabilization and the sale of the Nigeria finished product operations 20. Price mix added only 1% to revenue, so volume carried most of the top line 8-K.
Selling, general and administrative expenses rose 10% to $3,975 million on higher marketing and an annual incentive expense timing effect 20. Advertising expense was $1,777 million against $1,523 million a year earlier 21. Management lists higher marketing and operating expenses as partial offsets to comparable margin expansion 8-K.
Shipments ran ahead of consumption, and North America volume was flat
Unit case volume grew 5%, while concentrate sales grew 7%, which management attributes to the timing of concentrate shipments 8-K. North America unit case volume was even, as Trademark Coca-Cola growth was offset by a decline in water, sports, coffee and tea. Its operating income still grew 5% 8-K.
Regional quality differs. Latin America operating income was $1,152 million against $897 million a year earlier, but comparable currency neutral growth was 14% against 29% reported 8-K25. EMEA lost value share in total NARTD beverages, with losses in France and the United Kingdom 8-K. Asia Pacific price mix fell 2% on unfavorable mix 8-K.
Net income grew less than operating income, alongside a higher tax rate and a pension charge
Net income rose 8.5% to $4.01B against operating income growth of 12.1%, and net margin edged up to 30.0% from 29.7%. The effective tax rate was 16.1% against 11.9% a year earlier, when discrete tax benefits were $442 million; this quarter they were $172 million 3435. Other income (loss) - net was a $155 million loss and included a $167 million settlement loss and $25 million of special termination benefits on a non-U.S. pension plan 30.
The year-earlier loss of $237 million included a $393 million charge for held-for-sale Nigerian operations 31. EPS grew 8% to $0.93, and comparable EPS (company-defined, non-GAAP) grew 11% to $0.91 8-K.
What to watch next
Full-year guidance now calls for organic revenue growth of at least 5% (prior: approx 8-K. 5%), comparable EPS growth of at least 11% (prior: 9% to 10%) and free cash flow of at least $13.0 billion (non-GAAP) (prior: approx. $12.4 billion) 8-K.
Fourth quarter considerations include an approx. 4% headwind to comparable net revenues and approx 8-K. 3% to comparable EPS from acquisitions and divestitures, assuming the Africa bottling sale closes in the quarter, subject to regulatory approvals 8-K.
The BodyArmor trademark's fair value approximates its $2,440 million carrying value, and the 10-Q says a further impairment is likely if near-term results miss revised projections 2.
Sources
Produced by Clarifo Research with the Clarifo financial research engine from the company's public filings. AI was used in parts of the analysis and drafting. Figures are checked automatically against the filings they come from. This is not investment advice.