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Coca-Cola net revenues decline 16% in Q1

DBR Staff Writer Published 25 April 2018

Coca-Cola has reported that its net revenues for the first quarter of 2018 declined 16% to $7.6bn, compared to $9.1bn for the same period last year.

The company also saw a dip in the gross profit from $5.6bn for last year to $4.8bn for this year's first quarter.

Operating income declined by 8% $1.8bn in Q1, from $1.96bn reported in the last year’s quarter.

Net income attributable to shareholders increased from $1.18bn for last year’s period to $1.36bn for this quarter.

Coca-Cola has attributed the fall in net revenues to the 26% headwind from refranchising of bottling territories. Organic revenues grew by 5% for the quarter, driven by sales growth of 4% and price/mix growth of 1%.

The Coca-Cola Company president and CEO James Quincey said: "We're encouraged with our first quarter performance as we continue our evolution as a consumer-centric, total beverage company.

"We have the right strategies in place and remain confident in our ability to achieve our full year guidance."

The company claims that its focus on the One Brand Strategy for Trademark Coca-Cola led to 4% volume growth, fueled by 3% growth in brand Coca-Cola and double-digit growth in Coca-Cola Zero Sugar.

Total unit case volume also had increased by 3%, with growth in all categories and geographic operating groups.

Cash from operations for the period stood at $613m, which had fallen by 20% mainly due to the refranchising process taken up by the company at its North American bottling territories.

Its Diet Coke brand is said to have experienced volume growth in North America in the quarter. The introduction of four new flavours, along with new packaging and marketing has helped in increasing the sales.

In Europe, Middle East & Africa, the company’s net operating revenues for the quarter increased from last year’s first quarter’s $1.6bn to $1.8bn for this year’s period.

In Latin America, Coca-Cola’s net operating revenues for the quarter increased to $998 in Q1, compared to $926m reported in the year-ago period.

Its North American activities resulted in net operating revenues increasing from last year’s Q1 $2.4bn to this year’s Q1 $2.68bn, which was an 11% increase.

 


Image: Coca-Cola headquarters in Atlanta, Georgia. Photo: Courtesy of Amy Sparks.