Coca-Cola suffered through one of the worst quarters in its 134-year history this spring, as the pandemic canceled the public gatherings that fuel much of its sales.
Still, Atlanta-based Coke’s huge presence outside the U.S. bodes well for a rebound, executives said Tuesday, as many countries gradually emerge from coronavirus lockdowns.
Second-quarter results were brutal. Revenue fell 28% to $7.2 billion from the same period a year ago. Net income dropped 32% to $1.8 billion. Coke gets about half its sales from restaurants, movie theaters, sporting events and other large public gatherings.
The results placed among the worst in the beverage giant’s long history. Global sales volume of drinks fell 16% in the second quarter. The worst full-year volume decreases were 17% in 1932, during the Great Depression, and in 1945, during World War II. During the Spanish flu pandemic of 1918, full-year volume dropped 15%.
The second quarter is likely to be the company’s worst this year, although executives declined to provide a full-year forecast. Coke’s brands include Dasani bottled water, Simply fruit juices and Powerade sports drinks, in addition to its namesake cola and Sprite and Fanta sodas.
The quarterly results slightly outperformed analysts’ expectations, beating the per-share earnings estimate by a penny, according to FactSet Research Systems. Coke’s share price was 2.4% higher at $47.23 in early afternoon Tuesday trading. The shares had fallen 16% this year as of Monday.
Even with the poor showing, Coke remains on stable financial footing. It held $10 billion of cash as of June 30, compared with $6.5 billion at the end of 2019.
Chief Executive James Quincey expects business to return to full strength after the coronavirus threat is removed.
“We are social creatures and people will want to go out,” he said during a Tuesday call with investors. “There will be habits that will have to change, but we will go out and experience the world.”
The company provided details on a hands-free technology to let consumers buy fountain drinks through a smartphone. The Freestyle technology will be introduced at restaurants this year.
Coke also said it will step up efforts to address social justice in response to this summer’s protests of police brutality against African Americans and racial injustice. It will spend an additional $500 million with Black-owned suppliers over the next five years. And the company has paused social-media activity this month to review its policies and hold partners to a higher level of accountability.
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