Release Date: April 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you provide insights into the gross margin trends for the year and the factors influencing them?
A: John Murphy, President & CFO: The full year will continue to see benefits from refranchising efforts, which will positively impact the gross margin throughout the year. There will be some underlying expansion due to positive impacts and productivity, despite some cost increases in juice and sugar. Currency will remain a headwind. The net effect will be driven by refranchising efforts and underlying expansion, offset by currency headwinds.
Q: What are the current consumer trends in North America, particularly regarding channel shifts between at-home and away-from-home consumption?
A: James Robert B. Quincey, Chairman & CEO: In the U.S., there's a slight shift towards more at-home consumption, driven by lower-income consumers seeking value. This has led to a marginal shift in channel dynamics, with a bit more volume moving to at-home channels. The company is adjusting its revenue growth management and packaging strategies to align with these trends.
Q: How does Coca-Cola manage the impact of a strong dollar in international markets?
A: James Robert B. Quincey, Chairman & CEO: Markets are segmented into those where economic dynamics are local, like Europe and Japan, where Coca-Cola competes in local currency and uses long-term hedging strategies. In emerging markets with high inflation and devaluation, like Argentina, the focus is on local competition and long-term market winning, despite short-term dollar value fluctuations.
Q: Can you expand on the progress and future plans for the two-brand strategy with BODYARMOR and POWERADE in sports drinks?
A: James Robert B. Quincey, Chairman & CEO: Despite slower progress than desired with BODYARMOR, Coca-Cola sees long-term value in the dual-brand strategy. Recent product innovations and marketing partnerships, such as with the NHL, are showing positive signs. Enhanced focus on merchandising and sales efforts are expected to improve performance throughout the year.
Q: What is the performance outlook for Coca-Cola in Asia, particularly in China, and the expected recovery timeline?
A: James Robert B. Quincey, Chairman & CEO: China is experiencing solid performance, though consumer confidence hasn't fully rebounded to pre-2019 levels. The focus is on controlling what can be managed locally, such as marketing and store execution. Other parts of Asia, like Japan and South Korea, are showing strong performance and share gains.
Q: How is Coca-Cola's digital B2B strategy impacting category performance and market share?
A: James Robert B. Quincey, Chairman & CEO: Digital B2B platforms enhance relationships with retailers, allowing for more efficient ordering and account management. These platforms support growth in retail relationships and help maintain or grow market share by ensuring product availability and promoting loyalty programs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.