On Wednesday, Coca-Cola Co. posted revenue and profit that was better than had been expected during its third quarter as sales in North America increased by 3% thanks to more demand for Sprite, coffee and tea.
The beverage giant said it gained more market share versus its rivals, echoing the views of beverage industry analysts ahead of results that it had been eating into market share of PepsiCo Inc., its bitter arch rival.
While the overall volume sales for Coca-Cola across North America during its third quarter remained flat, sales of Sprite rose during the three-month period in the mid-single digits, and coffee and tea sales were up in the low-single digits. However, sales of Diet Coke declined.
Earlier this month, PepsiCo reported a decline in beverage sales for the quarter in North America, which was the first time that had happened over the past two years. PepsiCo was hit by weaker demand for its Gatorade products and for marketing mistakes.
Coca-Cola has gained share from Pepsi thanks to a better performance in territories that it franchised to bottlers and an aggressive push in non-carbonated drinks, said one Wall Street analyst in a note prior to the earnings being posted by Coca-Cola.
Coca-Cola to help its earnings has also slashed its costs, including through refranchising its bottle operations that are low margin, and lowering its overall workforce.
Coca-Cola’s cost of goods sold dropped 18% during the just ended quarter, and its general and selling expenses were down over 20%.
Net income that was attributable to shareholders of Coca-Cola was up ending the quarter at $1.45 billion equal to 33 cents a share for the three-month period that ended September 29. That was compared to $1.05 billion equal to 24 cents a share for the same period one year ago.
Excluding certain items, the beverage maker posted a profit per share of 50 cents, which beat the estimates of Wall Street analysts that were expecting on average 49 cents a share.
Revenue for the beverage giants was down over 14.5% to end the quarter at just over $9.08 billion as Coca-Cola refranchised some of its many bottling operations, but nevertheless beat Wall Street’s average estimate of just over $8.71 billion.
Coca-Cola and rivals like PepsiCo have battled to keep sales and profits higher as the consumer has shifted from sugary carbonated drinks to water or healthier drinks such as juice.