US: Coca-Cola Co sees Q1 profits drop, volumes rise
- Q1 net profits drop by 15% to US$1.75bn
- Net sales slip by 1% to $11.04bn
- Operating profits down by 4%, hitting $2.4bn
- New US bottler model unveiled
Coca-Cola released its first-quarter numbers today
The Coca-Cola Co has posted a drop in Q1 sales and profits and announced a proposed shake-up of its US bottling operations.
Net profits fell by 15% to US$1.75bn in the three months to 29 March, the Atlanta-based company said today (16 April). Net sales stayed mainly flat, down by 1% to $11.04bn over the same period while operating profits dropped by 4% to $2.4bn.
The company blamed two fewer selling days for the profits and sales declines, as well as expenses from structural changes.
Coca-Cola's global volumes were up by 4% in the period, and global sparkling beverage volumes increased by 3%. Brand Coca-Cola also posted a 3% year-on-year volumes rise.
Coca-Cola CEO Muhtar Kent said: “I am pleased with our first quarter performance results, having once again delivered solid growth against the backdrop of a still uncertain global economy.”
North America was Coca-Cola's biggest Q1 loser, with operating profits down by 24%, despite a 1% volumes increase. Currency neutral operating profits were down by 3% for the region. Meanwhile, Eurasia & Africa saw operating profits climb by 6%, while net sales improved by 9% and volumes increased by 15%.
Coca-Cola also announced the launch of a new bottler model in the US that will grant expanded territories to five Coca-Cola bottlers. The agreement is between Coca-Cola and Coca-Cola Bottling Co Consolidated, Coca-Cola Bottling Company United, Swire Coca-Cola USA, Coca-Cola Bottling Company High Country and Corinth Coca-Cola Bottling Works.
Under the deal, the bottlers can choose to enact an outright territory sale, a territory swap, or a sub-bottling arrangement, in which the bottler would make payments in exchange for exclusive operating rights.
If all parties agree to the deal, it could be finalised by next year, Coca-Cola said.
Coca-Cola's share price was up by 3% in pre-market trading.
To read the company's official statement, click here.
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