Dive Brief:
- Coca-Cola's fourth-quarter revenue exceeded analyst expectations, according to a company report. North American sales saw a 1% volume increase for the period, and carbonated soft drink also received a 1% sales boost.
- Company shares increased 37 cents in the fourth quarter, a decrease of 38 cents per share from Q4 of 2015. Revenue also dipped this quarter to $9 million from $10 billion at the end of 2015.
- Net operating revenue dropped nearly 6% to $9.41 billion, the seventh consecutive quarter of year-over-year sales declines. The company predicts an overall earnings decline of 1 to 4% in fiscal year 2017.
Dive Insight:
Coca-Cola's guidance fell short of estimates, but its Q4 revenue beat Wall Street expectations, which estimated a net operating revenue of $9.13 billion.
Global net revenue declined 6% for the period and 5% for the full year. Global volume sales also fell 1% in the fourth quarter, the result of high inflation levels in Latin American countries.
CEO Muhtar Kent said in the report that the company's flagship North American market saw net revenue growth of 8% for the quarter and 4% for the year. The company, Kent said, is "outperforming total retail value growth for both the North America nonalcoholic ready-to-drink beverage industry and U.S. consumer packaged goods companies."
The beverage giant is still working on franchising its bottling operations worldwide in order to focus on producing more profitable concentrate. An agreement to refranchise all company-owned bottling operations in China during Q4 announced in the report should strengthen Coca-Cola's global bottling system, Kent said. The company is in line to refranchise company-owned bottling operations in the U.S. by year's end, while the transformation of its bottling system in Japan continues.
Kent is coming to the end of his time as the company's CEO. On May 1, company president and COO James Quincey will succeed Kent, who will become the chairman of the board.
Quincey has overseen the company's Venturing and Emerging Brands unit, which manages investments and acquisitions of startups. VEB has extended Coca-Cola's portfolio to include cold pressed juice, aloe water and other non-carbonated beverage segments. Innovation played a significant role in sales upticks in other markets during the fourth quarter.