ATLANTA – Concentrate sales for The Coca-Cola Co. rose 26% during the second quarter of fiscal 2021, a positive sign as away-from-home markets reopened following last year’s pandemic-related closings. Adding to the positive momentum was an 11% growth in price/mix and market share gains in both at-home and away-from-home channels, according to the company.
“As we continue to deliver on our transformation, we are encouraged by our results and are raising our top line, bottom line and cash flow guidance even as we are accelerating investments for the future,” said James Robert B. Quincey, chairman and chief executive officer, during a July 21 conference call with securities analysts. “At the same time, we also recognize the trajectory may be dynamic and understand that we must remain flexible to respond to changes in the environment.”
Net income for the quarter ended July 2 rose 48% to $2.6 billion, equal to 61¢ per share on the common stock, when compared to the same period of the previous year. Quarterly sales rose 42% to $10.1 billion.
“Consumers have started to return to many prior routines,” Mr. Quincey said. “And, as a result, our away-from-home volumes steadily improved as a percent of our business this quarter, driving strong price/mix and margin acceleration across the enterprise. However, the recovery remains asynchronous, and several parts of the world have dealt with further waves of infections, leading to delayed openings and, in some cases, tightened restrictions. India and Southeast Asia were our only areas that did not see sequential volume acceleration on a two-year basis this quarter.”
Mr. Quincey said that while the company benefited from stronger away-from, at-home demand remained robust.
“…If you look at the at-home channels, those gains or those — that extra consumer interaction with brands and products at home over the last 15 months has created some new behaviors and engagement with brands that may well be enduring,” he said. “So, it’s quite possible that over time we will both regain the away-from-home business that we had before and hang on to some of the gains in the at-home.
“I mean you can look at e-commerce, which was the poster child for growth in Q2 last year, which grew exponentially. That has basically stabilized, growing a little bit this year. So, they’ve held on to a step-up.”
The quarterly results prompted management to raise Coca-Cola’s guidance for the rest of the year to earnings per share growth of 13% to 15% versus $1.95 during fiscal 2020, and organic sales growth between 12% and 14%.
“The recovery phase continues to be asynchronous, creating a dynamic demand environment in addition to causing many parts of the supply chain to experience tightness as a result,” said John Murphy, chief financial officer. “While experiencing some isolated pressure points, our team is navigating the challenges well through supplier diversification and inventory management.
“Despite recent upward pressures in many commodities driven by pandemic-related disruption, we feel good about the rest of the year. And as we anticipate hedges rolling off in 2022, we are working with our system to take appropriate action in the back half of this year to manage the ongoing volatility using revenue growth management capabilities and supply chain productivity levers.”
For the first six months of fiscal 2021, The Coca-Cola Co.’s net income rose 7% to $4.9 billion, equal to $1.13 per share. Sales rose 22% to $19.2 billion.
