Macroeconomic conditions, structural changes and foreign exchange headwinds continue to affect everything businesses. Beverage industry and Coca Cola in particular is no exceptional.
These challenges greatly affected Coca Cola earnings. The Company posted net revenue decline of 5%. While and organic revenues grew 3% in the quarter of 2016.
“Despite challenging macroeconomic conditions, structural changes and foreign exchange headwinds which contributed to a 5% decline in reported revenues, we delivered 3% organic revenue growth, gained value share in total nonalcoholic ready-to-drink beverages, expanded our operating margins and grew profits in line with our expectations. Strong performance in some of our largest and most developed markets, including the United States, Mexico and Japan, was offset by difficult external conditions in many of our emerging and developing markets, including China and Argentina.’’ Said Muhtar Kent, Chairman and Chief Executive Officer of The Coca-Cola.
He added: these factors combined to put pressure on our volume and top-line performance in the quarter, especially where we own bottling businesses. In these international operations where external headwinds have proven to be more severe than originally forecast, we are taking action by reassessing local market initiatives where needed and continuing our efforts in driving productivity.
“As we continue the transformation of our business, I am encouraged by our core business performance which grew ahead of our consolidated organic revenues in the quarter. We expect this to continue for the balance of the year as we remain confident in our segmented revenue growth strategy, our innovation pipeline, and efforts to increase and improve our advertising.”