Coca-Cola Q3 profit rises 38% on cost efficiencies, sales dip on refranchising costs

The Coca-Cola Company (TCCC) reported net revenue of $9.1bn for the third quarter of 2017, down 15% from last year’s $10.6bn, blaming the decline on ongoing refranchising of its bottler territories.

The soda giant said that total unit case volume was unchanged from last year, although certain emerging markets in Latin America and developing markets showed improving trends with slightly positive case volume growth, which offset declines in developed markets that were impacted by weather and the cycling of strong results from the prior year.

Net profit attributable to shareholders of Coca-Cola grew 38% to $1.45bn from $1.05bn in the previous year, driven by 18% decline in cost of goods sold and 20% drop in selling and administrative expenses.

Coke said it gained or maintained value share in sparkling soft drinks, juices, sports drinks, and ready-to-drink (“RTD”) tea.

The Atlanta-based company said that it continues to find ways to reduce the amount of added sugar in many ways of its beverage brands around the world and remains on track to reformulate more than 500 products this year. Coca-Cola Zero Sugar, the new formulation launched earlier this year continues to perform well with unit case volume in the high single digits, the company said. The beverage giant plans to roll out this new innovation to all key markets by the first quarter of 2018.

In early October, the company acquired the Topo Chico Premium Sparkling Mineral Water brand in the United States, continuing its move to diversify away from sparkling soft drinks.

Coca-Cola said it is nearing completion of refranchising of its U.S. bottling territories. It also noted that it has acquired the bottling assets of SABMiller in Coca-Cola Beverages Africa (CCBA) from AB InBev and will temporarily hold the majority interest until they are refranchised to other bottling partners sometime in 2018. In the interim, Coke will account for the acquired stake as a discontinued operation.

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