Coca-Cola revenue, profits fall on weak currencies

Coca-Cola’s revenue fell for the fourth straight quarter as weak demand in Europe and a strong dollar against other currencies cut into sales from other markets outside the United States, including Latin America.

Coke and its smaller rival, PepsiCo have been hurt as consumers increasingly turn away from carbonates and instead opt for healthier beverages such as teas, water, fruit juices and smoothies.

The rising strength of the dollar hasn’t helped matters for the company which derives a large percentage of its revenue from markets outside the United States.

Coke’s sales in Europe, its third largest market, slid 1% in the quarter, while in Latin America, sales fell 12.2%.

Sales in Asia Pacific region, including China dropped 4%, but volumes rose after the company sharply cut prices.

Coke is counting on a new marketing initiative such as the “One Brand” programme unveiled on Wednesday to help lift sales.

In the new branding design, all cans and bottles of its Coca-Cola soft drinks will have a similar appearance prominently featuring the red colour associated with regular coke, but sporting a disc band of the colour that distinguishes Diet Coke, Coke Zero and Coke Life.

The company’s operating revenue fell 4% to $10.28bn. However, organic revenue which does not include the effects of currency movements, acquisitions and divestitures climbed 2%.

Net income attributable to shareholders fell 4.5% to $1.48bn.

Coke maintained its 2016 forecast of 4 – 5% growth in organic revenue and 4 – 6% growth in earnings per share on a constant currency basis.

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