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Coca-Cola sees slide in Revenues amid coronavirus pandemic

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Coca-Cola sees slide in Revenues amid coronavirus pandemic

Coca-Cola sees slide in Revenues amid coronavirus pandemic
April 22
13:51 2020
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The Coca-Cola Company yesterday reported first-quarter 2020 results and provided insight into how the company is navigating through the ongoing coronavirus pandemic.

The company forecast a significant hit to current-quarter results as restaurants, theaters and other venues that represent about half of the company’s revenue remain closed because of the coronavirus pandemic.

The net revenues of the company declined 1% to $8.6 billion. Coca-Cola operating margin, was 27.7% versus 28.0% in the prior year, while comparable operating margin (non-GAAP) was 30.7% versus 28.2% in the prior year. Cash from operations was $556 million, down 29%.

The company entered 2020 with solid momentum, coming off strong results in 2019. Through the end of February, the company was growing volume 3%, excluding China, and was on track to achieve its previously provided full-year 2020 targets.

In March, as the coronavirus pandemic spread globally, countries meaningfully increased social distancing and shelter-in-place mandates. In markets around the world, the company subsequently saw significant changes in consumer purchase patterns, notably substantial declines in away-from-home channels. In at-home channels, the company witnessed early pantry loading in certain markets, followed by more normalized demand levels, along with a sharp increase in e-commerce. Given that away-from-home channels represent approximately half of the company’s revenues, the company expects the net effect of these consumer purchase patterns to have a significant impact on second-quarter results. For context, since the beginning of April, the company has experienced a volume decline globally of approximately 25%, with nearly all of that decline coming in away-from-home channels.

The ultimate impact on the second quarter and full-year 2020 is unknown at this time, as it will depend heavily on the duration of social distancing and shelter-in-place mandates, as well as the substance and pace of macroeconomic recovery. However, the impact to the second quarter will be material.

The Coca-Cola system continues to work to ensure the safety and support of its employees, consumers, customers and communities during this challenging time. The health and safety of Coca-Cola system employees remains the company’s highest priority

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