COCA-COLA reported weaker-than-expected sales volumes yesterday, blaming ongoing economic malaise and unusually poor weather for the downturn.
Coca-Cola said overall volume rose one per cent, which was below its expectations, and cited slow economies in Europe, Asia and Latin America. It also said historically wet and cold weather across various regions curbed sales of soft drinks and overall consumer spending.
Coke chief executive Muhtar Kent said he believes performance will improve in the second half of the year.
Quarterly net income dipped to $2.68bn, or 59 cents per share, from $2.79bn, or 61 cents per share, a year earlier. Revenue dropped three per cent to $12.75bn. By region, sales volume fell one per cent in North America and four per cent in Europe, but rose two per cent in Latin America, nine per cent in Eurasia and Africa, and two per cent in the Pacific region.
In China, volume was flat due in part to poor weather and an economic slowdown, which is expected to continue to hurt results throughout the year.
Coke expects growth to return in the second half as it “evolves” its strategy in China. It did not elaborate. Rival PepsiCo agreed in 2011 to sell its interest in 24 soft drink bottlers in China to Tingyi Holding after it lost money amid soaring material costs and competition with Coke.
At the time, Coke’s share of the Chinese market was more than triple that of PepsiCo.
City A.M. Reporter