Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Nyse  >  The Coca-Cola Company    KO

THE COCA-COLA COMPANY

(KO)
  Report
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsOther languagesPress ReleasesOfficial PublicationsSector newsMarketScreener StrategiesReco analystes

Coca Cola : CFO Helps Company Make Cuts, Operational Changes

11/25/2020 | 05:45am EST

By Mark Maurer

Coca-Cola Co.'s finance chief John Murphy is helping the company shrink its product portfolio along with its head count as part of a restructuring effort responding to the coronavirus pandemic.

The Atlanta-based beverage giant wants to cut the number of its brands, lay off or buy out thousands of workers and revise its marketing strategy.

Those plans are part of a strategic overhaul that began in 2017 to increase collaboration between business units and better understand consumer trends. The pandemic has accelerated the need for those changes, Chief Financial Officer John Murphy said in an interview with CFO Journal.

"The number one priority for me is to be able to look back on this period and say we actually moved the needle significantly on how we allocate our resources," Mr. Murphy said, referring to the restructuring.

Coca-Cola's global sales have taken a hit in recent quarters as many bars, sports stadiums and movie theaters that serve the company's soft drinks remain closed. Revenue for the third quarter that ended Sept. 25 fell 9% to $8.65 billion compared with the prior-year period, following a 28% decline in the second quarter from the year-earlier period.

The company said in October it plans to eliminate about 200 brands -- of a total of more than 500 -- to free up funds for other, more profitable products. Brands to be discontinued represent about 1% of net sales revenue and underperformed even before the pandemic began, a spokesman said.

Mr. Murphy said he works with Coca-Cola's marketing and operations chiefs to decide which brands to keep. "My role...has been to sort of steward and shepherd that process, marrying the strategic rationale for doing it with the economics," he said.

The heavy lifting of the restructuring is expected to be completed in the next six months, Mr. Murphy said. Coca-Cola will continue adding brands to its portfolio and remove those that "are not cutting it," he added, noting the company looks at criteria such as historic performance and anticipated consumer demand when assessing its brands.

The spokesman declined to provide a target for the company's cost savings.

Other food and beverage companies also have taken a close look at their product portfolios in recent months, marking a reversal of a yearslong trend that saw many such businesses adding new products to attract health-conscious consumers.

The pandemic increased the urgency for Coca-Cola to reduce the number of its brands because too many of them generated too little revenue, said Gerald Phelan, an analyst at credit rating firm S&P Global Ratings.

Coca-Cola has also cut jobs as part of its restructuring. In August, the company said it was offering buyouts to about 4,000 employees in the U.S. and Canada. Employees in certain other countries also received such offers, Mr. Murphy said.

The restructuring will allow Coca-Cola to function more like a network needing "less decision making, less bureaucracy and ultimately less people," Mr. Murphy added. The company had more than 86,000 employees at the end of 2019, according to a filing with securities regulators.

Mr. Murphy said he is also reviewing Coca-Cola's advertising and marketing expenses to better manage spending, especially for digital marketing. The company in 2019 allocated about $4.24 billion for advertising, up 3.2% from $4.11 billion in 2018, according to its latest annual report.

Coca-Cola in recent years spent too much on advertising agencies and marketing campaigns, said Nicholas Johnson, an analyst at Morningstar Research Services LLC, a research firm.

"When you have [such an] immediate...decline or disruption, it really forces you to re-evaluate through a more stringent lens," Mr. Johnson said, referring to the blow to Coca-Cola's business from the pandemic.

Write to Mark Maurer at mark.maurer@wsj.com

(END) Dow Jones Newswires

11-25-20 0544ET

Stocks mentioned in the article
ChangeLast1st jan.
THE COCA-COLA COMPANY -0.94% 48.49 Delayed Quote.-11.23%
All news about THE COCA-COLA COMPANY
01/21Coca-Cola Amatil's Fiscal Year Earnings Fall 14% Amid Pandemic
DJ
01/20COCA COLA : Bernstein Starts Coca-Cola at Outperform With $58 Price Target
MT
01/15A Year On, China Falls Short on Trade-Deal Targets
DJ
01/14SECTOR UPDATE : Afternoon Slump Drags Consumer Stocks Lower
MT
01/14SECTOR UPDATE : Consumer Discretionary Stocks Hanging On To Slim Advance
MT
01/14COCA COLA : Morgan Stanley Adjusts Coca-Cola's Price Target to $55 from $59, Kee..
MT
01/14COCA COLA : Sells ZICO Coconut Water to PowerPlant Ventures
MT
01/14Zico Beverage Brand Founder Buys Company Back From Coca-Cola
DJ
01/13CHEMESIS INTERNATIONAL : How AI is already driving self-service
AQ
01/13THE COCA-COLA COMPANY : Announces Timing of Fourth Quarter and Full Year 2020 Ea..
BU
More news
Financials (USD)
Sales 2020 33 025 M - -
Net income 2020 8 086 M - -
Net Debt 2020 37 337 M - -
P/E ratio 2020 26,1x
Yield 2020 3,35%
Capitalization 210 B 210 B -
EV / Sales 2020 7,50x
EV / Sales 2021 6,87x
Nbr of Employees 86 200
Free-Float 60,6%
Chart THE COCA-COLA COMPANY
Duration : Period :
The Coca-Cola Company Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends THE COCA-COLA COMPANY
Short TermMid-TermLong Term
TrendsBearishNeutralNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 23
Average target price 56,96 $
Last Close Price 48,95 $
Spread / Highest target 36,9%
Spread / Average Target 16,4%
Spread / Lowest Target 4,19%
EPS Revisions
Managers and Directors
NameTitle
James Quincey Chairman & Chief Executive Officer
Brian John S. Smith President & Chief Operating Officer
John Murphy Chief Financial Officer & Executive Vice President
Nancy W. Quan Chief Technology Officer & Senior Vice President
Wamwari Waichungo Vice President-Scientific & Regulatory Affairs
Sector and Competitors
1st jan.Capitalization (M$)
THE COCA-COLA COMPANY-11.23%210 359
KEURIG DR PEPPER INC.-1.44%44 385
COCA-COLA HBC AG-2.86%11 548
SUNTORY BEVERAGE & FOOD LIMITED-0.14%10 878
TINGYI (CAYMAN ISLANDS) HOLDING CORP.5.14%10 100
ARCA CONTINENTAL, S.A.B. DE C.V.-0.29%8 505