Coca-Cola (KO 0.08%) stock underperformed the market again last year, declining 7% in 2023 compared to a 24% rally in the S&P 500. That decline was enough to make the beverage giant among the weakest performers in the Dow Jones Industrial Average, which rose 14% on the year.

Coke had some good news for investors throughout the year, yet Wall Street was more concerned about its relatively weak growth compared to companies that operate outside of the consumer essentials niche.

The latest trends

Coca-Cola's operating trends have been mostly positive around sales and earnings growth, Yet the biggest knock against the business is soft sales volumes. Coke reported flat case volume in Q2 and logged just a 2% uptick in the most recent quarter. A year ago, the Q2 and Q3 growth figures were much stronger at 8% and 4%, respectively. Investors don't like to see soft volume because it implies difficulty ahead in aiming to accelerate growth.

Still, that weakening volume isn't hurting the short-term sales picture. In fact, Coke raised its 2023 sales outlook twice last year and is now expecting organic sales to rise by between 10% and 11%. That boost is mostly coming from higher prices, sure. But Coke is also benefiting from a demand tilt toward more premium products like energy drinks and teas.

The path forward

Coke's financial metrics remain impressive. Operating profit margin is holding near 30% of sales, or roughly double the rate that PepsiCo (PEP -0.37%) has been managing. This success gives Coke plenty of resources it can direct toward its growth initiatives.

It also means more cash returns to shareholders through a rising dividend payment. Coke has increased this payout for more than 60 consecutive years.

These factors should make for a brighter year ahead for investors, even if it might be some time before Coke can engineer sustainably higher sales volumes.