Coca-Cola Earnings Boosted by New Diet Flavors--2nd Update
April 24 2018 - 1:08PM
Dow Jones News
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)
Copyright (c) 2018 Dow Jones & Company, Inc.
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