Costs cuts at Coca-Cola go deeper
ATLANTA: Coca-Cola's sales declined in the first quarter as it restructured its business and the company said Tuesday that it will more than double the cost cuts it has already announced.
The maker of Fanta, Sprite and Smartwater says it plans to cut another $800 million in annualised savings in addition to the $300 billion it's already trimming. Most those savings are expected to be realized in 2018 and 2019, the company said.
Coca-Cola Company has also been reshaping its business by selling back its bottling and distribution operations to independent bottlers. That means Coke is becoming more focused on selling concentrates and marketing for its brands as its No. 2 executive, James Quincey, prepares to officially take over as CEO next week.
On a global basis, the Atlanta company said soda sales volume declined 1 percent, while the category including water, enhanced water and sports drinks rose 3 percent. Volume rose 2 percent in the category including tea and coffee. Volume for Fanta, Sprite and Coke Zero in the flagship North American market grew, while Diet Coke continued to decline.
For the first three months of the year, the company earned $1.18 billion, or 27 cents per share. Excluding one-time gains and costs, it said it earned 43 cents per share, a penny less than analysts expected, according to Zacks Investment Research.
Total revenue was $9.12 billion in the period, topping analyst forecasts for $8.96 billion.
Shares rose slightly before the opening bell Tuesday.