Coca-Cola Earnings Above Estimates Thanks To New Flavors And High Demand
Earlier in the week, the carbonated soft drink manufacturer Coca-Cola released its first-quarter earnings report. The company's performance managed to beat Wall Street estimates by a good margin, sending its shares up by as much as 3 percent. Part of the company's stellar performance has been attributed to its willingness to innovate and the popularity of its health-conscious products.
Coca-Cola reported a 5 percent increase in revenues to US$8.02 billion, earning around US$0.48 per share. The firm's organic sales, which exclude acquisitions and currency fluctuations, rose by around 6 percent. The numbers beat initial analyst's forecasts of US$0.46 per share and US$7.88 billion in earnings.
The beverage company, which mainly sells non-alcoholic drinks, has managed to adapt to changing consumer demands by tweaking its signature products and experimenting with new flavors. Its recently released orange-vanilla flavored cola was initially met with a lot of criticism. However, once it was released, it quickly became a hit with thousands of customers enjoying its unique taste.
Coca-Cola has also been getting a lot of sales from their Coke Zero Sugar cola, which was created with health-conscious consumers in mind. According to the company's chief executive officer, James Quincey, sales numbers for their Coke Zero Sugar product has hit double-digit percentages rises. With the rise of health consciousness and general fitness trends across the globe, the company's no-sugar products have managed to significantly increase in sales over the past few years.
Meanwhile, its new orange-vanilla flavored Coke has contributed immensely to their total numbers. As per the company's earnings report, total sales of carbonated drinks have risen by around 1 percent for the first quarter. The consumption of the company slew of flavored waters and sports drinks has also risen by around 6 percent.
Since it was founded in 1892, the company has really just been focusing only on its carbonated beverage products. However, that is now slowly changing as the company aims to become a "total beverage company." Quincey reiterated this strategy in the recently held earnings call and mentioned that they will be adding a myriad of new products, which will include smoothies, teas, coffees, and other flavored drinks.
In line with the strategy, Coca-Cola recently made a huge investment when it acquired Costa Coffee for US$5.1 billion. The company plans to incorporate the newly acquired company's products into its own portfolio. Coca-Cola is reportedly preparing to launch a ready-to-drink coffee product, which will likely be available in stores very soon.