Coca-Cola Co. announced that its profit had fallen by 4% during the last quarter, which was the second consecutive quarter profit dropped, as sales were hit by weakness in the economy in Europe and China, shifting tastes buds in the U.S. market and unseasonable weather in India and other places.
Coca-Cola has for a long time been able to tout its broad reach geographically, and its ability to make up slow sales in one of its markets, with higher sales in another.
The results of the latest quarter that ended June 30, show a limit to that type of strategy exists, especially when economic forces globally and Mother Nature refuse to cooperate.
One new strategy Coke has decided to implement is smaller packaging in China that will expand its reach as the product will be smaller thus more affordable.
India was hit by monsoons that hurt sales, especially due to the high growth enjoyed a year ago when the monsoon season was late in arriving.
Net income was $2.62 billion equal to 59 cents per share compared to last year’s same quarter income of $2.79 billion equal to 61 cents per share, the Atlanta-based company announced.
The results excluding items like cost of new productivity initiatives and restructuring charges left a profit of 63 cents per share, which matched the estimates of analysts on Wall Street.
Sales volume globally was up by 1%, which was less than the 3.3% that analysts had predicted.
Sales volume in Europe was down 4% due to the weakened economy and floods in Germany.
Volume in China was unchanged following a gain of 7% last year during the same quarter.
Sales volume in North America was lower by 1%, amidst weather that was unseasonably cold.