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Coca-Cola Co., the world's top soft drink company, yesterday it lowered its outlook for worldwide unit case volume growth this year to a rate of 4 percent to 5 percent, but said it remains confident it will meet its earnings target for the year.
Coca-Cola, which earlier had targeted worldwide unit case volume growth at 5 percent to 6 percent, said it had seen lower growth rates in the United States after the Sept. 11 attacks.
"Even though the underlying fundamental strengths of our business have not changed, caution dictates that we closely monitor the increased uncertainty in macroeconomic conditions," said Doug Daft, Coke's chairman and CEO. "Not surprisingly, following the tragic events of Sept. 11, we have experienced lower growth rates in the United States as consumers modified their behavior."
UBS Warburg beverage analyst Caroline Levy told Reuters it was "kind of surprising" that Coke said sales in the United States had shown a reaction to the recent events. "I would have expected them to say 'because we slowed advertising we've had a short term effect' or something like that. You just don't expect soft drinks to be economically sensitive, you really don't," she said.
The company's quarterly volume targets were in line with some beverage industry analysts' expectations. Coke expects its unit case volume, a key measure of financial health in the soft-drink industry, to grow by about 3 percent in North America for the quarter, according to Reuters.
The cola company said it sees third-quarter unit case volume up 3 percent to 4 percent in both its Latin America and Europe, Eurasia and Middle East regions. The company also said it sees third-quarter volume jumping 8 percent to 9 percent in Africa and 7 percent to 8 percent in Asia.
Coke's full-year volume outlook seems on target with analysts' views. On Monday, Levy trimmed her 2001 volume estimate to 3.6 percent, down from over 4 percent, due in part to the economic slowdown. She said a U.S. recession "could cause slowdowns" for Coke in Latin America and other regions, the report said.
Coca-Cola plans to report final third-quarter volume results and earnings during the week of Oct. 15.