Coca-Cola reports 33% profit drop in Q2
Coca-Cola reported a 33% decline in profits for the second quarter but expects demand to rebound after the end of the lockdowns.
Amelia Lucas reported the news for CNBC:
Coca-Cola on Tuesday reported its largest decline in quarterly revenue in at least 30 years, but the company sees demand improving as global lockdowns ease.
CEO James Quincey said the company believes the second quarter will likely be the most challenging of the year.
Shares of the company rose 3% in morning trading.
The Wall Street Journal’s Jennifer Maloney noted:
About half of Coca-Cola’s business comes from away-from-home venues—the restaurants, bars, movie theaters and sports stadiums that were shut around the world during the second quarter because of the pandemic.
But China, Southeast Asia and Western Europe have done a “pretty good job in managing the worst stages of the pandemic” and sales there should continue to improve, Coke’s finance chief, John Murphy, said in an interview. “Here in the U.S., we’re seeing a spike in a number of places but the degree of lockdown is not nearly what it was.”
Reuters’ Nivedita Balu wrote:
“With the bar adequately lowered for Q2 in recent weeks… the exit rate for volume trends for June/start to July was naturally a key focus for investors,” Jefferies analyst Kevin Grundy said.
Coca-Cola is expanding its digital presence through partnerships with third-party aggregators or by adding value bundles to restaurant menus as the pandemic prompts consumers to migrate to mobile delivery for groceries and prepared meals, Quincey said.