Coca-Cola Brews Up Stout Sales to Close Out FY21, but Cost Pressures Loom; Shares a Bit Inflated

Fourth-quarter results showcased the strength of wide-moat Coca-Cola’s leading brand mix, with organic sales up 9% (reflecting a 10% benefit from price/mix). We recognize this was on top of weak marks a year ago (down 3%), when the firm’s operations (particularly its away-from-home sales) were thwarted by mobility restrictions to curb the spread of COVID-19. However, we think the tide is turning; the fourth quarter marked the first since the pandemic that away-from-home volumes exceeded 2019 levels. And impressively, this hasn’t come at the expense of the firm’s at-home business, where management qualitatively cited continued strength.