(Reuters) – Coca-Cola Co KO.N beat revenue and profit expectations on Thursday as a partial reopening of theaters and restaurants boosted demand and helped the world’s largest soda maker bounce back from a shattering second quarter.
Declines in “away-from-home” sales eased to mid-teens range in the third quarter from about a 50% slump in April at the height of lockdowns, while demand for its trademark Coca-Cola and Coca-Cola Zero Sugar also rose.
Coca-Cola makes about half of its revenue by selling its soft drinks at public venues and their closure had forced it to offer voluntary job cuts to about 4,000 workers in the United States.
Chief Executive James Quincey said the situation is “dynamic”, as rising cases during the winter could result in regional lockdowns, adding the recovery in “away-from-home” sales had showed signs of getting stalled in September.
“We don’t expect to return to the peak levels of global lockdown, but we are prepared for setbacks due to the local spikes in cases and targeted restrictions and closures,” Quincey told analysts.
The company said consumers were buy more sparkling soft drinks and juices from grocery stores and online.
“Coronavirus effects may linger for at least a couple of quarters, but we are seeing better progress than expected,” Edward Jones analyst John Boylan said.
Rival PepsiCo Inc PEP.O too survived the lockdown-fueled slump with better sales at convenience stores and gas stations as well as good demand for snacks.
Coca-Cola said it will cut the number of brands by half to about 200 and phase out products like ZICO coconut water and TaB sodas as part of its strategy to streamline beverage portfolio and focus more on popular products.
On a per share basis, the Atlanta-based company earned 9 cents above expectations. Net revenue of $8.7 billion also beat estimates, according to Refinitiv data.
Reporting by Nivedita Balu in Bengaluru; Editing by Arun Koyyur