Coca-Cola Co has recorded a 5% fall in quarterly revenue, as fresh COVID-19 pandemic curbs slammed the brakes on the soda maker's biggest sales drivers, such as restaurants, cinemas and sporting events, in many parts of the world.
The company's net revenue fell to $8.61 billion in the fourth quarter that ended on December 31, 2020, from $9.07 billion a year earlier.
Coca-Cola has forecast a return to organic revenue growth this year after a torrid 2020, betting vaccine rollouts across the world will encourage consumers to return to cinemas and sporting events that drive a chunk of its sales.
The company depends on non-retail channels for over a third of its sales, but the health crisis limited restaurant operations, forced the cancellation of events and kept consumers largely indoors, causing a 9% drop in organic sales last year.
"It is still early days in the vaccination process, and we'd expect to see further improvements in our business as vaccinations become more widely available over the coming months," CEO James Quincey told analysts.
However, he added that near-term recovery will still be impacted by the presence of the virus in most markets.
The company expects 2021 adjusted earnings to grow in the high-single digits to low-double digits and organic revenue to rise in the high-single digits.
Coca-Cola also warned that it expects a potential liability of approximately $12 billion in a dispute with the US Internal Revenue Service on how much it charges foreign affiliates for the rights to make and sell Coke products abroad.
The company said that the US tax court "misinterpreted and misapplied" the regulations in its conclusions in November and that it will "appeal and vigorously defend" its position. Coca-Cola recorded a tax reserve of $438 million last year.
"This does not change our long-term view of Coke emerging from the pandemic better positioned than it was before," Edward Jones analyst John Boylan said, referring to the tax dispute.
Coca-Cola's shares were up 1% as the world's largest beverage maker also beat estimates, earning 47 cents per share in the fourth quarter, five cents more than expectations.