Coke Sales Flat In Second Quarter Amid Soda Declines

Posted On: 7/28/2016

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TAGS: Coke vending, Coca Cola financials, vending, Coca-Cola Co second quarter, declining soda sales

ATLANTA -- Coca-Cola Co. said global volume was flat in the second quarter, with declining soda sales offset by sales growth in noncarbonated drinks.

The Atlanta-based beverage giant said second-quarter net income rose to $3.45 billion, or 79¢ a share, compared with earnings of $3.11 billion, or 71¢ a share, in the year-ago period. But revenue fell 5% to $11.54 billion in the latest quarter from $12.16 billion a year earlier. Second-quarter sales fell in each of Coke's regional units, except in North America.

The company blamed weakened CSD demand on economic conditions in emerging markets where soda represents a higher portion of sales, putting a squeeze on the category's volume.

In North America, CSDs declined 1%, with growth in Sprite, Fanta and energy drinks helping to offset a decline in trademark Coca-Cola. Coke's portfolio of still beverages -- Dasani, Vitamin Water, Minute Maid and Powerade -- grew 3% in the quarter.

"Strong performance in some of our largest and most developed markets, including the United States, Mexico and Japan, was offset by difficult external conditions in many of our emerging and developing markets, including China and Argentina," said Coca-Cola chief executive Muhtar Kent. "These factors combined to put pressure on our volume and top-line performance in the quarter, especially where we own bottling businesses.

To offset continued declines in soda volume in the U.S., Coca-Cola Co. and rival PepsiCo have raised prices, packaged drinks in smaller cans and bottles for calorie-watchers and added real sugar to appeal to consumers seeking natural sweeteners.

For the year, Coca-Cola said it now expects overall sales to climb 3%, down from its previous forecast for organic sales growth of 4% to 5%. It expects comparable earnings to decline 4% to 7%, implying earnings of $1.86 to $1.92 per share. But it said pricing helped lift "organic" revenue 3%.