Coke's Soda Volume Stays Flat, Aided by Zero Sugar--Update
October 25 2017 - 11:37AM
Dow Jones News
By Jennifer Maloney and Austen Hufford
Coca-Cola Co.'s newest diet soda helped the company keep its
soda volume flat in the latest quarter as it attempts to expand its
portfolio of beverages and hold on to customers who are abandoning
sugary drinks.
Coca-Cola Zero Sugar, which the Atlanta company rolled out in
the U.S. in August after introducing it last year in the U.K.,
replaced Coke Zero. Both are sweetened with aspartame and
acesulfame K, though Zero Sugar is formulated to taste more like
the original Coke.
On Wednesday, the company said the new drink had performed well
in its third quarter, increasing its volume in the high single
digits. The company plans to roll out Zero Sugar to the rest of its
key markets by early next year.
In a call with analysts, Coke's chief executive James Quincey
acknowledged that Zero Sugar has cannibalized some sales of Coke
Light and original Coke, "but in the net, there is additional
volume and additional consumers coming back into the
franchise."
Coke's overall beverage volumes during the quarter were flat
world-wide as growth in developing markets essentially offset
weakness in developed markets.
The company saw 1% volume growth in its juice and dairy products
as well as its tea and coffee drinks. Soda growth was flat while
volume for water and sports drinks fell 1%.
Mr. Quincey said water volumes fell because the company
deliberately cut back on low-margin bulk-water sales in some
markets.
Shares fell 0.3% in morning trading to $46.03.
Coca-Cola on Wednesday reaffirmed its full-year earnings
outlook, but cut its capital spending plans, saying it will now
spend about $2 billion this year, down from an earlier forecast of
$2 billion to $2.5 billion.
Coke's revenue fell in the quarter because of divestitures of
its U.S. bottling operations. The company expects to complete the
reorganization by year's end. The company said its adjusted
operating margin grew to 27.4% from 23.36% in the same quarter last
year, largely as a result of the divestitures, a main goal of the
initiative.
In all, Coke reported earnings of $1.45 billion, or 33 cents a
share, up from $1.05 billion, or 24 a share, a year earlier. On an
adjusted basis, earnings grew to 50 cents a share from 49 cents.
Revenue fell about 15% to $9.08 billion, largely as a result of the
bottling divestitures. Adjusted revenue grew 4%.
Analysts polled by Thomson Reuters were expecting earnings of 49
cents a share on $8.72 billion in sales.
Write to Jennifer Maloney at jennifer.maloney@wsj.com and Austen
Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
October 25, 2017 11:22 ET (15:22 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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