KO Coca Cola Company

By Cara Lombardo 

New flavors of Diet Coke in skinny, redesigned cans have added some pop to Coca-Cola Co.'s recent sales of the drink.

Coca-Cola sold more Diet Coke in North America in its latest quarter, returning the product to quarterly volume growth for the first time since 2010, the company said Tuesday. Though the increase was modest and the new drinks haven't been on shelves very long, Coca-Cola said early results suggest its plan to reinvigorate the brand is working.

Analysts have been skeptical that adding flavors like Zesty Blood Orange and Twisted Mango, which are artificially sweetened, will win back former soda drinkers who have moved on to healthier-seeming options such as iced tea and flavored seltzer waters.

The launch, helped by a strong marketing push, was "bold enough and interesting enough" to engage lapsed Diet Coke fans, 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 12:53 ET (16:53 GMT)

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