SOTS 2nd Hour: Coca-Cola CEO, Marriott CEO, & Evercore's S&P Bull Call 2/10/26

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Sara Eisen (1:07)

Good Tuesday morning, welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber. We are live as always from Post 9 of the New York Stock Exchange. Coming up this hour, two big earnings interviews you won't want to miss. We will speak exclusively with Coca-Cola CEO James Quincy as that stock dips after missing revenue estimates for the first time in five years, though it has recovered nicely. Plus, Marriott CEO Tony Capuiano is with us as that stock jumps. The hotel name posting some weakness in North America, countered by strength in luxury and international. And we'll talk with Evercore's Julian Emanuel about Alphabet's 100-year bond offering and what he says that signals about the health of the overall market.

Carl Quintanilla (1:46)

It's been a busy morning for Economic Data, getting some more right now. Let's get to Rick Santelli. Hey, Rick.

Rick Santelli (1:54)

So fourth quarter for business inventories expected to be up two-tenths of a percent comes in a little light up one-tenth of a percent. That would be the lightest business inventory build going back to August of last year when it was unchanged. We had back-to-back months of up three-tenths, which was just revised. October now stands at up two-tenths. The positive numbers, of course, are holding GDP. Any kind of negative inventory numbers would subtract for that. And we are all monitoring growth, of course, to try to bring down some of those deficit to GDP numbers. Sara, back to you.

Sara Eisen (2:29)

Okay. Thank you, Rick. Let's get into all the earnings. Coca-Cola shares falling but off the lows after reporting a modest growth outlook for the year ahead. The company missing revenue expectations for the first time in five years. Water, sports, coffee and tea all outperforming the rest of the portfolio for the quarter. Let's bring in CEO James Quincy, his final earnings interview as CEO before Enrique Braun steps into the role on March 31st. I'm going to miss it, James. Thank you for joining us.

James Quincy (2:56)

Yeah, no problem. You're welcome.

Sara Eisen (2:59)

We'll talk about the succession in just a moment. Just first on the quarter, you had conditioned investors to do beats. We haven't seen a revenue miss like this in quite a while. What happened?

James Quincy (3:11)

I think there were a couple of atypical things that happened in the fourth quarter, around some of the business mix, the finished goods of our bottling businesses that caused a negative price mix in the fourth quarter. It was very atypical and as I always encourage investors to take an average four-quarter view of that variable because it produces some anomalous effects occasionally, which it did in the fourth quarter. But when you read through that, what you see is underlying strength in the revenue, 1% volume growth, which is relatively strong in consumer products these days, 4% pricing, so a 5% revenue. We're confident we've got momentum going into 2026 So a weird anomaly, but underlying strong growth in the revenue and testament to everything that people are doing across the Coke system.

Sara Eisen (3:59)

I think that on the organic revenue forecast, 4-5%, some were looking for at least 5%. So are you conservative? Is there something that's giving you a little bit of caution out there?

James Quincy (4:12)

I think we, you know, it's right at the beginning of the year. And I think we've taken a realistic and prudent approach to a number of markets out there, particularly some of the international markets, where we want to see conditions improve, and we need to do some things to execute better. We had a little bit of weakness in the back of last year in India, in China, and a couple of the ASEAN markets. We've got plans in place. We've got momentum.