Coca-Cola reported better-than-expected earnings in the first quarter and said the impact of tariffs on its business are likely to be “manageable.”

Coke and other beverage makers are facing a 25% tariff on the aluminum they use for cans, among other items. Last week, rival PepsiCo lowered its full-year earnings expectations due to the impact of tariffs.

“Based on what we know today, the dynamic tariff landscape could impact pockets of our system’s cost structure, as well as consumer sentiment in our markets,” Coke Chief Financial Officer John Murphy said Tuesday in a conference call with investors.

But Murphy said Coke has “numerous levers to help manage the impact.” The company has said previously that it may shift aluminum suppliers or rely more heavily on plastic or glass bottles.

Global Volume Growth Led by Key Markets

Coke’s unit case volumes grew 2% in the first quarter, led by higher demand in China, India and Brazil. Coca-Cola Zero Sugar was a standout, with case volumes up 14%. Demand for sports drinks and coffee fell.

In North America, case volumes fell 3%. Prices rose 8%, partly because Coke sold a higher mix of premium beverages like Topo Chico sparkling water and Fairlife milk.

North American Sales Face Challenges

Coke Chairman and CEO James Quincey said a video that was circulating on social media in February hurt U.S. sales, particularly among Hispanic consumers in the South. The video claimed that Coke was reporting its own workers to U.S. Immigration and Customs Enforcement officers and called for a boycott of the company.

Quincey said the claims in the video were false and the controversy has largely abated. Coke is trying to win back Hispanic sales by promoting the company’s local economic impact and offering targeted deals, he added.

The video aside, Quincey said there was a pullback in purchasing on both sides of the U.S.-Mexico border due to consumer uncertainty.

“I think some of the geopolitical tension was just causing people to be a little more cautious with their spend,” he said “A little less going out, a little more keeping the money in the pocket.”

Revenue fell 2% to $11.1 billion in the January-March period, the company said Tuesday. Adjusted for one-time items, including currency fluctuations, Coke reported revenue of $11.2 billion. That beat Wall Street’s expectation of $11.15 billion, according to analysts polled by FactSet.

Net income rose 5% to $3.3 billion for the quarter. Adjusted for one-time items, the Atlanta company earned 73 cents per share. That beat expectations of 72 cents.

Coke moderated expectations for its full-year profit Tuesday. The company said it now expects full-year adjusted earnings to grow 7% to 9%, down from 8% to 10% previously. Coke earned $2.88 per share in 2024.

Shares of Coca-Cola rose less than 1% in Tuesday morning trading.