Coca-Cola recovery continues as it grows leaner in pandemic

ATLANTA — Coca-Cola measured gradual improvement in the third quarter as it focused on emerging leaner from the global pandemic.

Revenue fell 9% to $8.7 billion, edging out Wall Street expectations of $8.4 billion, according to analysts polled by FactSet. It was far better than the 28% drop in revenue in the second quarter.

Net income was $1.7 billion. Earnings, adjusted for one-time items, fell 2% to 55 cents per share. That also outpaced analyst forecasts of 46 cents.

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

It has been making up for some of that damage as people buy more beverages, like orange juice, at home. Sales of sparkling soft drinks fell 1% in the July-September period; sales of trademark Coca-Cola grew 1% for the quarter. But other beverages struggled. Sales of enhanced water and sports drinks dropped 11% and tea and coffee sales were down 15%, hurt by closures of Costa retail stores.

So far this month, sales based on unit cases are seeing single-digit declines compared to last year; in April, those sales were down 25%.

Chairman and CEO James Quincey said the company has accelerated a planned reorganization that will put more emphasis on fast-growing brands.

In August, the company began offering voluntary buyouts to around 4,000 people, which it hopes will reduce the number of people it eventually lays off. Coke is reducing the number of individual business segments from 17 to nine.

Coca-Cola Co. also announced last week that it was retiring several products this year, including Tab, Zico coconut water, Diet Coke Fiesty Cherry and regional offerings like Northern Neck Ginger Ale. The company had announced in July summer that it was retiring Odwalla juices.

Coke plans to reduce its brands by half, to 200.

Coke said it will use the savings to invest in growing brands like Minute Maid and Simply juices and fund the launch of new products like Topo Chico Hard Seltzer, Coca-Cola Energy and Aha sparkling water.

Coke shares were up 2% to $51.20 in premarket trading.