Coca-Cola is drawing on early pandemic lessons to prepare for the hit of the Delta variant


Coca-Cola Co will be relying on its pandemic-proven strategy of focusing on bigger brands and doubling its supply chain to combat the potential impact of the Delta variant of the coronavirus, its chief financial officer said on Wednesday.

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Coca-Cola Co will be relying on its pandemic-proven strategy of focusing on bigger brands and doubling its supply chain to combat the potential impact of the Delta variant of the coronavirus, its chief financial officer said on Wednesday.

CFO John Murphy’s comments come as the reopening of the global economy helped the beverage giant exceed expectations for the second quarter and raise its full-year revenue forecast, causing the Dow component stock to rise as much as 3 percent.

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Rising infections from Australia to the United States have brought back lockdowns and other restrictions in some regions, raised concerns about the pace of economic recovery and rocked stock markets earlier this week.

Sales in some markets in Asia were hurt by the revival in the second quarter, Murphy said, adding that some likely impact of the variant has been incorporated into the increased sales forecast.

“When things get tighter, focus on the bigger brands,” Murphy said.

Coca-Cola streamlined its product range last year to alleviate the consequences of the pandemic. The company, which owns brands such as Sprite, Fanta and Dasani, has discontinued its TaB Diet Soda and Coca-Cola Energy brands in the US and sold its coconut water brand, ZICO.

The company is particularly vulnerable to the closure of theaters, restaurants and stadiums, unlike competitor PepsiCo, which is more focused on food and retail channels.

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“If we have a venue re-opening or a re-introduction of capacity constraints, Coke sales will suffer. This is why we see Pepsi as the riskier name,” said Garrett Nelson, senior equity analyst at CFRA Research.

Total adjusted sales for Coca-Cola rose 41.1 percent to $ 10.13 billion in the second quarter, beating estimates of $ 9.32 billion, according to IBES data from Refinitv.

The company raised its annual organic revenue target to a 12-14 percent increase from the previously expected high single-digit increase. The adjusted annual earnings per share are expected to increase by 13 to 15 percent.

Adjusted earnings of 68 cents per share exceeded expectations of 56 cents.

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