Coca-Cola Reported its Largest Decline in Quarterly Revenue

On Tuesday, Coca-Cola released information regarding its fiscal second quarter. Unfortunately, the company reported its largest decline in quarterly revenue in at least 30 years.

In the second fiscal second quarter, earnings per share surpassed expectations. However, compared to the same period of time last year, net income fell from $2.61 billion or 61 cents per share to $1.78 billion or 41 cents per share.

Notably, excluding items, Coca-Cola earned 42 cents per share. This result exceeded expectations.

However, net sales fell 28% to $7.2 billion. Moreover, organic revenue, which removes the impact of currency, acquisitions as well as divestitures dropped 26% in the fiscal second quarter.

Furthermore, the global unit case volume declined by 16%. In April, the volume fell by 25%. Thankfully, this number dropped to 10% in June. Interestingly, so far in July, volume fell by the mid-single digits.

Coca-Cola and its fiscal second quarter

Also, sparkling drinks’ volume declined by 12% in the fiscal second quarter. Coke’s namesake brand then experienced problems, as volumes fell by 7%.

Moreover, the demand for Coca-Cola Zero Sugar, which heavily contributed to sales, dropped by 4%.

This is not the end of the story, however. Tea and coffee volumes declined by 31%, largely due to temporary closures of nearly all Costa cafes in Western Europe. Additionally, water, enhanced water as well as sports drinks also struggled in the fiscal second quarter, as sales fell by 24%. Also, the volume of juice, dairy, and plant-based beverages dropped by 20%.

Coca-Cola wants to streamline its portfolio. The company plans to pay more attention to larger and more popular brands. Interestingly, less than half of its 400 major brands account for 98% of the company’s revenue. The company plans to prioritize small brands that are growing, as it does not want to completely abandon smaller brands.