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What to Expect from Coca-Cola’s First-Quarter Revenue


Jul. 31 2019, Updated 2:45 p.m. ET

Back on growth track

Coca-Cola’s (KO) revenue has declined for 15 consecutive quarters due to adverse foreign currency movements and the impact of the refranchising of the company’s bottling territories. Analysts expect Coca-Cola’s revenue to grow in the first quarter of 2019 on a reported basis. Analysts expect Coca-Cola’s first-quarter revenue to rise 3.4% on a year-over-year basis to $7.88 billion. Coca-Cola exceeded analysts’ expectations in all the quarters of 2018.

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The company’s top line in the first quarter is expected to benefit from innovation, revenue management strategies, and the impact of mergers and acquisitions. For full-year 2019, analysts expect Coca-Cola’s revenue to grow 9.2% to $34.8 billion. Rival PepsiCo (PEP) reported its first-quarter results on April 17. PepsiCo’s revenue grew 2.6% to $12.88 billion in the first quarter of 2019.

Company’s guidance

Coca-Cola did not issue specific guidance for the first quarter revenue but expects organic revenue growth of 4% in full-year 2019. This organic revenue growth estimate is lower than the company’s organic growth rate of 5% in 2018. Coca-Cola expects its 2019 revenue to be adversely impacted by currency headwinds and volatile conditions in certain emerging markets.

Will volumes improve?

Coca-Cola’s unit case volume grew 2% in 2018 driven by 3% volume growth in developing and emerging markets and a slight improvement in developed markets. The company’s sparkling soft drink volumes grew 2% last year driven by double-digit growth in Coca-Cola Zero Sugar volumes and strength in the low-calorie and no-calorie offerings of Sprite and Fanta. The company’s focus on expanding its low or no-calorie soda offerings is helping in improving its volumes.

Coca-Cola’s non-soda categories posted the following performances in 2018:

  • Tea and coffee volumes increased 1%.
  • Water, enhanced water, and sports drink volumes grew 3%.
  • Juice, dairy, and plant-based beverage volumes fell 1%.

Coca-Cola is trying to boost the volumes of its non-soda beverages through innovation and by making strategic acquisitions. Coca-Cola acquired coffee company Costa for $4.9 billion to pursue growth in the hot beverages market.

Other strategic deals made last year, including the acquisition of Australian kombucha-maker Organic & Raw Trading Co. and French fruit juice maker Tropico, are expected to boost volumes of non-soda drinks.


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