Vending

Coca-Cola Q3 sales, earnings fall, as away-from-home segment slides

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October 22, 2020

Coca-Cola Co.'s net revenues of $8.7 billion dipped 9% in the third quarter ending Sept. 25 compared to last year's $9.5 billion for the period, but beat expectations by $330 million, according to Seeking Alpha.

GAAP earnings per share were 40 cents, missing expectations by 0.06 cents while Non-GAAP EPS of 55 cents beat expectations by 0.09 cents.

Shares traded at $50.88 this morning against a 52-week high of $60.13

Basic net income per share fell 33% from 61 cents in last year's third quarter to 40 cents this year. Diluted income per share was 60 cents last year compared to 40 cents this year.

"We are accelerating our transformation that was already underway, shaping our company to recover faster than the broader economic recovery," James Quincey, chairman and CEO, said in the earnings release. "While many challenges still lie ahead, our progress in the quarter gives me confidence we are on the right path."

Revenue declines versus the prior year were driven by ongoing pressure in away-from-home channels partially offset by sustained growth in at-home channels.

However, since the company's last earnings update in July, global unit case volume trends have continued to improve, according to the earnings report. The pace in the third quarter was more gradual than the second quarter, and the percentage decline in global unit case volume for October month-to-date was low single digits.

Category cluster performance was as follows:

Sparkling soft drinks declined 1%, led by a decline in the fountain business in North America and in Mexico due to pressure in away-from-home channels. Trademark Coca-Cola grew 1%. Coca-Cola Zero Sugar grew 7% in the quarter and 4% year-to-date.

Juice, dairy and plant-based beverages declined 6% as solid performance by Simply and fairlife in North America was more than offset by pressure in the Asia Pacific and Latin America operating groups.

Water, enhanced water and sports drinks declined 11%, led by a broad-based decline across operating groups, primarily due to a decline in lower-margin water brands.

Tea and coffee declined 15%, primarily driven by coronavirus-related pressure on Costa retail stores, along with some pressure on the doğadan tea business in Turkey.

Due to the uncertainty remaining surrounding the coronavirus pandemic including a resurgence in various markets, the ultimate impact on its near-term results is unknown, the company said in the press release.

For an update on how the coronavirus has affected convenience services, click here.