A person wearing a mask pushes a dolly cart past a Coca-Cola truck as the city continues Phase 4 of re-opening following restrictions imposed to slow the spread of coronavirus on September 16, 2020 in New York City.
Alexi Rosenfeld | Getty Images
Coca-Cola on Wednesday reported that its quarterly revenue fell 9% as the coronavirus pandemic continues to weigh on demand for its drinks.
Shares of the company rose 1% in premarket trading.
Here’s what the company reported for the quarter ended Sept. 25 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: 55 cents, adjusted, vs. 46 cents expected
- Revenue: $8.65 billion vs. $8.36 billion expected
Coke reported third-quarter net income of $1.74 billion, or 40 cents per share, down from $2.59 billion, or 60 cents per share, a year earlier.
Excluding asset impairments, severance costs related to its restructuring plan and other items, the beverage giant earned 55 cents per share, topping the 46 cents per share expected by analysts surveyed by Refinitiv.
Net sales dropped 9% to $8.65 billion, beating expectations of $8.36 billion. Organic sales fell 6%, and unit case volume, which helps measure demand without the impact of pricing or foreign currency, declined 4%.
All four of Coke’s drink categories reported declines in unit case volume. Sparkling soft drinks was the least affected, with its volume falling only 1%. Demand for Coke Zero Sugar and trademark Coke drinks lifted the category, although overall it was hurt by the decline in the North American fountain business.
Juice, dairy and plant-based drinks saw volumes shrink by 6%, hurt by pressure in Asia Pacific and Latin America. Unit case volume of water, enhanced water and sports drinks fell by 11%. Tea and coffee was the hardest hit, with demand dropping 15%, primarily due to the company’s Costa cafes.
The company noted sequential improvements in demand during the quarter. While the pandemic continues to limit drink purchases at movie theaters, restaurants and office buildings, Coke said that at-home demand is still elevated.
As it navigates the crisis, Coke is undergoing a transformation. It is slimming its portfolio, cutting drinks like Tab that haven’t sold well and don’t have much opportunity for growth. The company recorded a $160 million impairment charge this quarter tied to its Odwalla brand, which is also being discontinued. At the end of the process, it plans to slash its number of master brands by 50% to about 200.
Coke did not provide an updated outlook for the remainder of 2020, citing the uncertainty of the impact of the pandemic. The company pulled its forecast in March.
Read the full earnings report here.
This story is developing. Please check back for updates.
