US: Price/mix slowdown could hamper Coca-Cola Co growth - analyst
Coca-Cola management has hinted at economic clouds on the horizon
A less favourable price/mix and economic shifts in North America in 2012 could weaken solid growth for The Coca-Cola Co in its first half, an analyst has said.
The Atlanta-based company yesterday (17 July) posted healthy H1 and Q2 figures, with global volumes up by 4% and net profits climbing by 3% in the first six months of the year compared to the year before. However, further discounting in the second half of this year will decelerate global price/mix to as low as 1%, analyst Mark Swartzberg, of Stifel Nicolaus, said in a note today.
Swartzberg also said management hints at a drop-off in North American sales did not bode well for full-year figures.
“Most surprising to us were comments that immediate consumption trends in North America began weakening subsequent to mid-May,” he said. “Coca-Cola cites the economy, and we note that PepsiCo’s stated Q2 improvement in single-serve sales covers a period ending in early June.
"We therefore consider this another symptom of more challenging macro conditions.”
Coca-Cola is expected to announce a refranchising of its US production and distribution, Swartzberg said. The move will help the company raise capital, he forecast.
To read just-drinks' coverage of Coca-Cola Co's results conference call, click here.
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