Coca-Cola releases first quarter results
James Quincey to assume CEO role next week
Atlanta-based The Coca-Cola Co. reported first quarter 2017 operating results. For the quarter, net revenues declined 11 percent to $9.1 billion, impacted by a headwind from acquisitions, divestitures and structural items of 10 percent related to the ongoing refranchising of bottling territories and a foreign currency exchange headwind of 1 percent.
The company’s value share growth outpaced its volume share in total non-alcohol ready-to-drink (NARTD) beverages, reflecting its shifted focus from driving volume growth to driving revenue growth, it says. It also gained value share in sparkling soft drinks and juice, dairy and plant-based beverages.
Muhtar Kent, chairman and chief executive officer (CEO) of The Coca-Cola Co. said in a statement: "The first quarter performance was in line with our plan, and we remain on track to deliver our underlying revenue and profit targets for the full year. As anticipated, revenues in the quarter were adversely impacted by two fewer days and the shift of the Easter holiday. Most importantly, we continue to execute against the long-term strategic transformation plan for the company — a plan that I am confident will deliver even greater shareowner and stakeholder value in the years to come.
"Next week I will proudly hand over the CEO reins to James Quincey with full confidence that he will complete the company's transformation and lead our aggressive growth agenda,” he continued. “His vision of accelerating The Coca-Cola Company's evolution into a total beverage business with a focus on driving sustainable growth across a broad portfolio is exciting for all stakeholders, and he has my full support.”
President and Chief Operating Officer James Quincey said: "We are rapidly evolving our growth model to make changes that will result in an even more consumer-centric portfolio that meets people's changing tastes and preferences. Importantly, these portfolio changes will help our consumers moderate the amount of added sugar they consume. In addition, as we approach the end of our refranchising and implement our new, more agile operating model, we are expanding our productivity program. Our revamped portfolio, a stronger global bottling system and a leaner enterprise structure will allow us to capture an increasing share of the vibrant value growth available in the beverage industry and to deliver value for our shareowners. It will be an honor and a privilege to lead the organization as CEO, and I look forward to working with our people around the world to accelerate our growth."
In North America, Coca Cola reported a price/mix growth of 3 percent, which reflects its continued execution of disciplined occasion, brand, price and package strategy, it says. Sparkling soft drinks price/mix growth of 1 percent was unfavorably impacted by two points due to the timing of shipments in the foodservice and on-premise channel. Acquisitions, divestitures and structural items reflect the impact of the ongoing refranchising of bottling territories in North America.
It also reported gained value share in total NARTD beverages for the 28th consecutive quarter in North America. The company also gained value share in sparkling soft drinks; juice, dairy and plant-based beverages; and tea and coffee.
In sparkling soft drinks, the company reported mid-single-digit unit case volume growth in Fanta and Sprite as well as low single-digit growth in Coca-Cola Zero, which was offset primarily by a mid-single-digit decline in Diet Coke. In juice, dairy and plant-based beverages, fairlife ultra-filtered milk unit case volume grew more than 50 percent.