Bengaluru — Coca-Cola topped Wall Street estimates for quarterly sales and profit on Wednesday, as more consumers reached out for its Zero Sugar sub-brand and the new version of Diet Coke.
Coke and its smaller rival PepsiCo have been focusing on healthier drinks to garner market share as health-conscious consumers shift away from sugary sodas.
Earlier this year, Coca-Cola launched new flavours of its popular Diet Coke brand in slimmer packaging and debuted Coca-Cola Stevia No Sugar in New Zealand, and dairy-free smoothie AdeZ in Europe in the quarter.
Organic revenue, or sales, from its core beverage business rose 5% in the quarter, with Diet Coke, Coke Zero and sparkling water contributing the most. Volumes, a key indicator of demand, grew 2% in the quarter on strong performance of its trademark Coca-Cola brand, and Fuze Tea.
Organic sales in Europe rose 7% after the company reformulated its recipe for a few sodas in response to UK’s tax on sugar.
"We were impressed with Coca-Cola’s ability to deliver a strong and balanced topline," Wells Fargo analyst Bonnie Herzog wrote in a note.
Sales in North America — its biggest revenue-generating region — rose 7% to $3.12bn, but missed analysts’ average estimate of $3.14bn, mainly due to a drop in demand for juices and plant-based beverages.
Net income attributable to the company’s shareholders rose to $2.32bn, or 54c a share, in the second quarter ended June 29, from $1.37bn, or 32c a share, a year earlier. Excluding one-time items, Coca-Cola said it earned 61c a share, beating analysts’ average estimate by 1c, according to Thomson Reuters.
Revenue fell 8% to $8.93bn, hurt by the divestiture of its low-margin bottling operations. Analysts had estimated sales of $8.54bn.
Coca-Cola re-affirmed its 2018 profit outlook and said it expects full-year organic revenue to be at least 4%. Shares of the Atlanta-based company were marginally up at $45.50 during pre-market hours.
Reuters
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