Resurgent virus slows recovery at Coca-Cola

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In this Feb. 4, 2021, photo, a lighted sign adorns the Coca-Cola Store in Las Vegas. The resurgent coronavirus slowed Coca-Colas recovery in the fourth quarter, and the company said the slump has continued into this year. (AP Photo/John Locher)

A resurgent coronavirus slowed Coca-Cola’s recovery in the fourth quarter, and the company said the slump has continued into this year.

But the Atlanta-based beverage giant said it's confident it will see improvement as vaccines roll out around the world and it delivers new products in fast-growing categories, like an updated version of Coke Zero Sugar and Topo Chico Hard Seltzer, a rare foray into alcohol for the company.

As a measure of that confidence, Coke issued financial guidance for the first time since the pandemic began, saying it expects 2021 earnings to match or exceed those in 2019. Many of the biggest corporations in the U.S. have pulled projections due to the unprecedented scope of the pandemic.

“The trajectory of the recovery will be a significant factor, and we expect to be dealing with COVID-19 for the better part of the year, with the first half likely to be more challenging than the second half," Coke Chief Financial Officer John Murphy said Wednesday in a conference call with analysts.

Coke has been decimated by the closure of arenas, restaurants, theaters and other public places, where it normally books about half its revenue.

Global case volume slipped 3% for the October-December period, exceeding Wall Street projections for a decline of 2.2%, according to analysts polled by FactSet. Case volume rose 2% in Latin America thanks to strong demand in Brazil, but it fell elsewhere.

Unit case volumes of soft drinks fell 1% in the fourth quarter, primarily due to declines in away-from-home business in North America and Europe. Juice and dairy sales fell 2% and water and sports drink demand fell 9%. Tea and coffee sales dropped 15% as the virus hampered sales at Costa coffee shops.

Coke’s net revenue fell 5% to $8.6 billion for the fourth quarter. It was a significant improvement from the second quarter, when revenue fell 29%, and the third quarter, when revenue fell 9%.