The beverage company’s global volumes have dropped 25% since early April.
“The ultimate impact on the second quarter and the year 2020 is unknown at the moment, as it will strongly depend on the duration of social distancing and the housing mandates in place, as well as the substance and pace of the recovery macroeconomic, “said Coke. said. “However, the impact on the second quarter will be significant. “
Coke’s comments came as the company released its first quarter results, which received a short-term increase in consumers purchasing beverages as they prepared for an extended stay at home.
The company’s shares rose 1.3% in the pre-market trade.
Here’s what the company reported:
- Earnings per share: 51 cents, adjusted
- Revenue: $ 8.60 billion
Coke reported first quarter net earnings of $ 2.78 billion, or 64 cents a share, compared to $ 1.68 billion, or 39 cents a share, a year earlier.
Excluding asset impairment charges and other items, Coke earned 51 cents per share.
Net sales fell 1% to $ 8.60 billion. Organic revenue, which eliminates the impact of foreign currencies, acquisitions and divestments, for the quarter remained stable.
Wall Street forecast earnings per share of 44 cents on revenue of $ 8.28 billion, according to an analyst survey of Refinitiv. However, it is difficult to compare the reported earnings to analysts’ estimates for the Coke quarter, as the coronavirus pandemic continues to hit global economies and makes the impact of earnings difficult to assess.
Excluding China, the company’s unit case volume increased by 3% until the end of February, before countries around the world began to adopt social distancing measures and stay orders home. Coke saw increased demand from grocery stores and e-commerce channels for its beverages in certain markets in March due to storage. Roughly half of the business’s revenue generally comes from consumers drinking at home.
In Latin America and Europe, the Middle East and Africa, volumes remained stable for the quarter, as sales were hit hard in March due to the virus. Asia-Pacific, where the virus struck first, fell 7%. North America is the only region to experience increasing volumes.
Unit volume of water, improved water and sports drinks increased 2% during the quarter, but the segment was the only category to experience volume growth, as demand in Asia-Pacific increased decreases.
The volume of sparkling soft drinks fell by 2%. Its juice, dairy and plant-based beverage segment and its tea and coffee businesses both recorded volume decreases of 6% during the quarter.
The company said its annual financial results could not be estimated this time, citing uncertainty surrounding the coronavirus pandemic. The company withdrew its outlook for 2020 in March. Coke previously forecasted that organic revenues in 2020 would increase by 5% and adjusted earnings per share would increase by 7% to $ 2.25.
Coke also said on Tuesday that a stronger dollar would hurt his second-quarter earnings by 4% to 5%.
Read the full revenue report here.