Coca-Cola Co has beaten revenue and profit expectations as a partial reopening of cinemas and restaurants boosted demand and helped the world's largest soda maker to bounce back from a shattering second quarter.
Declines in "away-from-home" sales eased to mid-teens range in the third quarter from a slump of approximately 50% in April at the height of lockdowns, while demand for its trademark Coca-Cola and Coca-Cola Zero Sugar also rose.
Coca-Cola makes approximately half of its revenue by selling its soft drinks at public venues, and their closure had forced it to offer voluntary job cuts to approximately 4,000 workers in the United States. CEO James Quincey said that the situation is "dynamic", as rising cases during the winter could result in regional lockdowns, adding that the recovery in "away-from-home" sales showed signs of getting stalled in September.
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"We don't expect to return to the peak levels of global lockdown, but we are prepared for setbacks due to the local spikes in cases and targeted restrictions and closures," Quincey told analysts.
The company said that consumers are buying more sparkling soft drinks and juices from grocery stores and online.
"Coronavirus effects may linger for at least a couple of quarters, but we are seeing better progress than expected," Edward Jones analyst John Boylan said.
Cutting Brands, Earnings Per Share And Net Revenue
Coca-Cola said that it will cut the number of brands it produces by half to approximately 200 and phase out products such as ZICO coconut water and TaB sodas as part of its strategy to streamline its beverage portfolio and focus more on popular products.
On a per share basis, the Atlanta-based company earned nine cents above expectations. Net revenue of $8.7 billion also beat estimates, according to Refinitiv data.