Coca-Cola (KO) posted stronger-than-expected first quarter earnings Tuesday, but pulled its full-year profit guidance as the impact of sports and stadium closures from the coronavirus pandemic hits near-term sales prospects.
Coca-Cola said adjusted earnings for the three months ending in March were pegged 51 cents per share, up 3 cents from the same period last year and 7 cents ahead of the Street consensus forecast. Group revenues, Coca-Cola said, rose 7.2% to $8.6 billion, firmly ahead of analysts' estimates of an $8.3 billion tally.
Coca-Cola said anticipated declines in its 'away-from-home' sales channel, which is partly comprised of bulk sales at sporting and entertainment events, will offset gains from consumers adding to their personal storage and likely have a 'significant' impact on second quarter earnings. However, the company also sees a solid second half recovery.
"Our approach to navigating the pandemic is grounded in our company’s purpose, which ensures that we continuously strive to make a difference for people in the communities we serve around the world," said CEO James Quincey. "We’ve been through challenging times before as a company, and we believe we're well positioned to manage through and emerge stronger."
"The power of the Coca-Cola system is our greatest strength in times of crisis," he added. "The resilience of our people, the equity of our brands and the strength of our bottling partners continue to be competitive advantages in the market."
Coca-Cola shares were marked 1.2% lower in early trading following the earnings release to change hands at $45.95 each, extending its year-to-date decline to around 17%.
Two Circles, a sports marketing agency, said Tuesday that just over half of the 48,803 ticketed sporting events scheduled for this year are likely to take place, with cancellations likely to hive some $61.6 billion from total projected revenues.
The Tokyo Olympics, which Coca-Cola sponsors, was postponed until the summer of 2021 last month, while restaurants and movie theaters, which are also part of Coke's "away-from-home' channel, have been closed for several weeks in both north America and Europe.