Coca-Cola’s Q1 sales tank 28% due to COVID-19 restrictions

Coca-Cola (NYSE: KO) published its quarterly earnings report on Tuesday that highlighted its revenue to have tanked the sharpest in the second quarter in over two decades. The company, however, expressed confidence that demand was recovering quickly as governments started easing COVID-19 restrictions in June. Coca-Cola had previously published an upbeat earnings report for the first quarter in April.

Shares of the company were reported about 1% up in premarket trading on Tuesday. At £36.43 per share, Coca-Cola is currently more than 15% down year to date in the stock market after recovering from an even lower £29.58 per share in March.

Coca-Cola’s Q2 financial results versus analysts’ estimates

According to Refinitiv, experts had forecast the company to print £5.67 billion in revenue in the second quarter. Their estimate for earnings per share (EPS) was capped at 31.50 pence. In its report on Tuesday, Coca-Cola matched the estimate for revenue posting £5.67 billion in Q2, but its earnings per share came in slightly higher at 33.08 pence.

At £1.40 billion, the American multinational beverage corporation said that its net income in the recent quarter came in significantly lower than £2.06 billion in the same quarter last year. On a year over year basis, its sales in Q1 saw a 28% decline. The company’s board declared regular quarterly dividend last week.

In terms of organic revenue, Coca-Cola registered a 26% decline in the first quarter. The Atlanta-based company also noted a 16% decline in global unit case volume in Q1 but said that improvement was evident in recent weeks. In June, unit case volume came in only 10% lower as compared to a much broader 25% decline in April.

Other prominent figures in Coca-Cola’s financial report

Other prominent figures in Coca-Cola’s financial report on Tuesday include a 12% volume decline in sparkling soft drinks segment, a 7% volume decline in its namesake brand, and a 4% volume decline in Zero Sugar.

The hit to its other drink units, however, was even harder in the recent quarter. Tea and coffee saw a 31% decline in volumes as COVID-19 pushed almost all Costa Cafes into temporarily shutting down in Western Europe.

Volume declined by 24% in Coca-Cola’s business for water, enhanced water, and sports drinks. Lastly, plant-based beverages, dairy, and juice segment printed a 20% volume decline in the first quarter.

At the time of writing, the American multinational company has a market cap of £156 billion and a price to earnings ratio of 19.88.