"Coca-Cola Recovers to Pre-Corona Levels... Continued Improvement in Performance Expected"

[Image source=EPA Yonhap News]

[Asia Economy Reporter Minji Lee] Coca-Cola is expected to continue its performance improvement trend due to increased sales from COVID-19 vaccinations and planned price increases in the second half of the year.

On the 25th at the New York Stock Exchange, Coca-Cola's stock price rose about 5.4%, from $54.11 to $57.01 this month. The stock price showed an upward trend after announcing sales and net income that exceeded market expectations.

Coca-Cola's consolidated sales and operating profit for the second quarter were $10.129 billion and $3 billion, respectively, up 41.7% and 52% compared to the same period last year. These figures surpassed market expectations by 9.1% and 7.1%, respectively. Compared to the second quarter of 2019, before COVID-19, sales and operating profit increased by 1.3% and 0.9%, respectively.

Except for some countries such as India, sales recovery was clearly evident mainly in developed countries. Operating margin also improved by 2.1 percentage points due to channel and product mix improvements and favorable exchange rates. Taehyun Kim, a researcher at IBK Investment & Securities, said, “Compared to the second quarter of 2019 before COVID-19, sales by region increased the most in North America (6.9%), where vaccine supply exceeded 50%. Latin America and Europe, the Middle East, and Africa also improved by 6.5% and 4.5%, respectively, but sales in the Asia-Pacific region decreased by 2.4% as social distancing and lockdown policies were relatively slower to ease.”

By product category, Coca-Cola increased by 12% compared to the same period last year, and carbonated beverage sales including this increased by 14%. Health drinks, juices, and dairy products increased by 25%, and sports drinks and tea increased by 35% and 18%, respectively. With the reopening of Costa stores in the U.S., the coffee segment increased by 78% compared to the same period last year.

According to the company's guidance, the annual net sales growth rate this year is expected to increase by 12-14% compared to one year ago. Researcher Kim said, “This is a 5% upward revision from before, and with the rapid global expansion of vaccine supply and planned product price increases in the second half of the year, the performance improvement trend is expected to continue.”