Coca-Cola Reports The Worst Sales Drop In A Decade
Sales of the Coca-Cola Company sank by 28% in the second quarter of this year compared to last year, according to the financial report of the manufacturer; this is the largest quarterly drop in revenue for the company within at least the past decade.
The company explains such poor reporting by the COVID-19 pandemic, which caused the closure of bars, restaurants, and other catering establishments in many countries of the world. They usually account for about half of the beverage manufacturer's revenue. The most affected markets were Europe, the Middle East, and Africa, where the company's revenue fell by 37% at once. By comparison, sales in North America sank by 16%.
The company's total revenue was $7.2 billion, and net profit fell by a third to $1.76 billion. At the same time, Coca-Cola notes that the second quarter was most likely the most difficult, and then the company's indicators will improve. According to the report, if in April the drop in global sales was 25% compared to last year, in June this figure was already 10% worse than last year.
Net revenues declined 28% to $7.2 billion. Organic revenues (non-GAAP) declined 26%. Revenue performance included a 22% decline in concentrate sales and a 4% decline in price/mix. The revenue declines were primarily driven by pressure in away-from-home channels, which represent approximately half of the company's revenues.
However, the reporting of Coca-Cola looks extremely poor against the background of quarterly results of its main competitor in the market — PepsiCo, which reported last week a decrease in revenue for the quarter by only 3% compared to last year.