Coca-Cola Co has lowered its full-year revenue forecast after reporting weaker-than-expected growth for its fiscal second quarter. The soft drinks giant was hurt in particular by weakness in China and Latin America, as well as lower volumes for fizzy drinks.
Net profit for the quarter was up 11% to $3.45bn, but net revenue fell by 5.1% to $11.5bn (+2% on an organic basis) – the fifth straight quarter it has declined. Overall volumes were flat, as a 1% decline in fizzy drinks was offset by a 2% rise in still drinks.
Revenue in North America was up 2.2%, but it reported declines in all other regions. Coca-Cola cited weak sales in China as a key reason, noting that wholesalers in the country are reducing inventory levels as consumer confidence drops. The group said it is reworking its offer in the country, by pushing more premium products and moving into Tier II and rural areas.
It also struggled in Latin America, given the economic difficulties being faced by Argentina, Brazil, and Venezuela.
Coca-Cola now expects full-year revenue to grow by 3% on an organic basis, compared to the 4%-5% forecast it had made earlier. It also expects earnings per share will fall 4%-7% this year.