ATLANTA — Decisive action taken last year to reinvigorate growth and increase profitability paid off for The Coca-Cola Co. in the second quarter of fiscal 2015 ended July 3, as net income at the beverage giant climbed 20% to $3,108 million, equal to 71c per share on the common stock, up from $2,595 million, or 58c per share, in the same period a year ago. Excluding the benefits of the acquisition of Monster Beverage Corp., e.p.s. during the second quarter was 63c per share. Operating revenues, meanwhile, slipped 3% to $12,156 million from $12,574 million.
“While many markets around the world faced macroeconomic challenges, our focus on improving our execution enabled us to deliver improved top-line results,” Muhtar Kent, chairman and chief executive officer, said during a July 22 conference call with analysts. “Net revenues grew 4% on an organic basis, driven by positive price mix, and 3% growth in concentrate shipments. … Our top-line performance was broad based, with each operating segment delivering positive organic revenue growth, demonstrating the strength of our global brand portfolio and the robust distribution capabilities of our bottling partners. As a result, we once again gained global value share in non-alcoholic ready-to-drink beverages in the quarter, with gains in both sparkling and still beverages.”
Operating income in North America during the second quarter increased 7% to $887 million from $827 million, while operating revenues rose 3% to $5,917 million from $5,717 million.
Mr. Kent said the company’s North America business delivered “a very strong quarter,” attributing the segment’s success to better marketing, as well as a disciplined approach to managing volume, price and mix.
|Muhtar Kent, chairman and c.e.o. of The Coca-Cola Company.|
“Importantly, in North America, we delivered revenue growth in our sparkling portfolio in the quarter due to the further expansion of our pricing strategy, resulting in 4% sparkling price mix,” he said. “Our disciplined price tax strategy has seen wide adoption across all retail channels as we emphasize smaller proprietary packages, while also raising prices on traditional packages, including 12-oz cans and 2-liter bottles.
“While sparkling unit case volume grew 1%, transactions increased 2% due to strong growth in the smaller packages, which are on trend with consumer preferences, such as our mini cans, which grew volume double-digits during the quarter.”
Mr. Kent also spoke of the infusion of improved marketing during the quarter, saying Coca-Cola intends to continue down that path. Coca-Cola has received positive feedback from its “Share A Coke” program, which puts popular names and words on packages.
“We found that disciplined quality market investments drive growth better than any other strategy or action,” he said. “We’re seeing good initial results in markets that have received the incremental media investment and also have improved the quality of marketing in our case. The marketing investments in North America is a great point, which is a real contributing factor in the strong performance in the quarter.”For the six months ended July 3, net income was $4,665 million, equal to $1.06 per share, up 11% from $4,214 million, or 95c per share, in the same period a year ago. Operating revenues were $22,867 million, down from $23,150 million.