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24042019

Coke Zero Sugar, new flavors lift Coca-Cola results; shares rise

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The world's largest beverage producers, Coca-Cola and PepsiCo Inc, respond to changing consumer tastes, tweaking ingredients and experimenting with new flavors that are more targeted at health conscious consumers.

These efforts helped restore soda sales after years of recession.

CEO James Quincey (James Quincey) said that sales of Coke Zero Sugar showed double-digit percentage growth, while its new orange-vanilla soda Coke also became a hit.

Sales of carbonated beverages rose by 1% due to strong performance of the Coke brand, while smaller packages of flavored water and sports drinks of immediate consumption led to an increase in sales by 6%.

Quincey is trying to make Coca-Cola a "complete beverage company” by adding coffee, tea, smoothies and flavored water to a portfolio that traditionally offers carbonated drinks.

She recently made a major bet on coffee, buying Costa Coffee for $ 5.1 billion, and is preparing to launch ready-to-sell Costa products in stores.

"They are making progress with innovation as a whole ... for many of these innovations it’s still early, but we really like the increasing attention that the company pays to its main brands as well as its coffee products,” Edward Jones analyst John Boylan said.
Organic sales of Coca-Cola, which exclude the effects of fluctuations in exchange rates and acquisitions, rose by 6 percent, driven by price increases and bottle purchases due to uncertainty with Brexit.

Revenue rose 5 percent to $ 8.02 billion, and the company adjusted 48 cents per share.

Analysts had forecast earnings of 46 cents per share and earnings of $ 7.88 billion, according to IBES from Refinitiv.

In the second quarter, the company predicted a 6 percent increase in comparable revenues, mainly due to acquisitions and asset sales, but said it continues to be affected by a stronger dollar.
He maintained his organic sales growth forecast for 4 years throughout the year.

"We expect that this year the company will exceed the forecast for 4 percent organic growth, which is due to innovation, increasing global market share and price impact,” writes Guggenheim Partners analyst Laurent Grande.



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