Coca-Cola Earnings Boosted by New Diet Flavors--Update
April 24 2018 - 12:34PM
Dow Jones News
By Cara Lombardo
Coca-Cola Co. sold more Diet Coke in North America in its latest
quarter for the first time since 2010 after adding four new flavors
in skinny, redesigned cans.
Though the increase was modest and the new drinks haven't been
on shelves very long, the company said early results suggest its
plan to reinvigorate the Diet Coke brand is working.
Analysts have been skeptical that adding flavors like Zesty
Blood Orange and Twisted Mango, which are still artificially
sweetened, will win back former soda drinkers who have moved on to
healthier-seeming options such as ice tea and flavored seltzer
waters.
The launch appeared to be "bold enough and interesting enough"
to not just engage lapsed Diet Coke drinkers but also millennials
and fans of sparkling water, Chief Executive James Quincey told
analysts on an earnings call.
But the modest improvement reflects only the first several weeks
of sales and Mr. Quincey warned sales could soften.
The last time Diet Coke's quarterly volumes increased in North
America, its largest region by sales, was the fourth quarter of
2010, a company spokesman said. Diet Coke's sales volume in the
U.S. has declined every year since 2006, according to
industry-publication Beverage Digest.
About a third of the volume improvement came from the new
flavors, which aren't available in as many package sizes as regular
Diet Coke, Mr. Quincey said on a call with media. He said sales
were roughly equally split among the flavors, which also include
Ginger Lime and Feisty Cherry.
Across its portfolio, Coca-Cola's drink volume grew 3% in its
first quarter, including a 4% rise in soda and a 5% rise in coffee
and tea. Volumes improved for all Coke- and Coca-Cola-branded
products, including a 3% increase for the company's namesake cola
and a double-digit increase for Coca-Cola Zero Sugar.
Volumes declined in juice, where higher costs have caused
Coca-Cola and others to shrink packages.
The drinks company's first-quarter organic revenue, which
excludes currency swings, acquisitions and divestitures, increased
5% from a year ago. Overall, revenue fell 16% to $7.6 billion, due
to the divestiture of bottling operations. Analysts polled by
Thomson Reuters had expected $7.34 billion in revenue.
The Atlanta-based company reported a profit of $1.37 billion,
compared with $1.2 billion a year ago.
On an adjusted basis, the company earned 47 cents a share, just
above the 46 cents analysts expected.
Write to Cara Lombardo at cara.lombardo@wsj.com
(END) Dow Jones Newswires
April 24, 2018 12:19 ET (16:19 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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