The Coca-Cola Company records 28% decline in revenue in the its second quarter impacted by COVID-19

USA – The Coca-Cola Company has reported a 28% decline in its second-quarter net revenue yet has witnessed improvement since April in global sales volumes.

In its last financial report, Coca-Cola announced that its global sales volumes had fallen 25% in April, but the company has reported a decline of approximately 10% in June.

The company posted net revenues of US$7.2 billion in the quarter driven by the impact of Covid-19 on its away-from-home channels, which represents approximately half of Coca-Cola’s revenue.

“I’m proud of the people of the Coca-Cola system as we continue to adjust and accelerate our strategies in this fast-changing landscape,” said James Quincey, chairman and CEO of The Coca-Cola Company.

“We believe the second quarter will prove to be the most challenging of the year; however, we still have work to do as we drive our pursuit of ‘Beverages for Life’ and meet evolving consumer needs.”

Operating income declined 34% in the quarter and unit case volumes of tea and coffee fell by 31%, driven by the temporary closures of Costa retail stores in Western Europe.

Coca-Cola says its unit case volumes for July to date is down mid-single digits globally, driven by improvements in the away-from-home channels correlating to the ease of lockdowns. The company expects this positive correlation to continue in the second half of 2020 but is withholding its full-year guidance as the ultimate impact is unknown.

Unit case volumes of juice, dairy and plant-based beverages declined 20%, while sparkling soft drinks fell 12% and water, enhanced water and sports drinks were down 24%.

Adjusted revenue fell to US$7.18 billion in the three months ended June 26, while net income attributable to the beverage maker’s shareholders tumbled about 32% to US$1.78 billion.

Coca-Cola says it is focusing investments on prioritised brands, refreshed marketing approaches and new capabilities to capitalise on the emerging shifts in consumer behaviours.

For example, the company recently launched a contactless solution for its Coca-Cola Freestyle dispensaries which allows consumers to pour their drink with an app. It plans to roll out its technology innovation to all dispensers across the US by the end of year.

Coca-Cola generates a sizeable portion of its revenues by selling its soft drinks and concentrates to restaurants and theater operators, such as McDonald’s Corp and AMC Entertainment Holdings Inc, but most of them had to close some or all of their operations due to the health crisis.

But as lockdowns eased, unit case volume trends, a key demand indicator, improved sequentially, from a decline of about 25% in April to a fall of about 10% in June. Volume trends was down mid-single digits globally for July to-date.

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